Due to uncertainty in the global EV industry, Vietnamese EV manufacturer VinFast has lowered its delivery projection for this year by 20,000 units and postponed the opening of its planned $4 billion factory in North Carolina until 2028. VinFast, which was started in 2017 by Pham Nhat Vuong, the richest man in Vietnam, and which switched to producing only electric cars in 2022, said that it would only be delivering 80,000 vehicles this year instead of the 100,000 that had originally been scheduled.
Comparing the second quarter to the preceding three-month period, sales at the Vietnamese EV manufacturer increased 24% to almost 12,000 units. VinFast sold 21,747 units overall in the first half of 2024, up 92% from the same time the previous year but only around one-fourth of the increased yearly projection.
“While the second-quarter production results were encouraging, persistent economic headwinds and unpredictability in different macro-economies and (the) global EV scenario necessitate a more cautious outlook for the rest of the year,” VinFast stated in a statement on Saturday.
VinFast’s future plans
The manufacturer of electric vehicles (EVs) continues to project robust sales growth in the second half of the year, propelled by a broadened product offering and regional development into new and existing markets, particularly those in Asia. VinFast announced in a statement that it will push back its existing 2025 opening date for its planned factory in North Carolina to 2028. May saw a potential delay reported by Reuters, which cited a source briefed on the situation.
VinFast declared in 2022 that it would construct an electric vehicle (EV) and battery plant in the US with a 150,000-vehicle annual production capacity. The company did this in an attempt to capitalize on the Biden administration’s efforts to approve subsidies for EVs manufactured in the US.
However, due to high borrowing costs and consumers’ preference for less expensive gasoline-electric hybrids, demand for EVs has waned, prompting many manufacturers to reevaluate their plans for new plants and models. “This decision will allow the company to maximize its capital allocation while controlling its short-term spending better while focusing additional funds on supporting near-term growth targets and enhancing existing operations,” said VinFast.
“The modification doesn’t change VinFast’s core growth strategy and key operational targets.” VinFast recorded a $618 million net loss in the first quarter and is still non-profit. While revenue decreased 31% from the prior three months, it nearly tripled from the same period last year. On August 15, the business is scheduled to release its second-quarter earnings.
