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VinFast, Vietnam’s Electric Vehicle Maker, to Finally Commence Construction on U.S. Factory

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VinFast to Finally Commence Construction on U.S. Factory

VinFast, the Vietnamese electric vehicle manufacturer, has officially confirmed with CNBC that it will commence construction of its electric vehicle factory in North Carolina on Friday morning local time. The automaker expressed its excitement about this significant milestone in VinFast’s history in the United States, with CEO Le Thi Thu Thuy stating that obtaining the construction permit was a major achievement. The groundbreaking of the U.S. plant marks an important step forward for VinFast’s presence in the American market.

According to VinFast, the sprawling 1,800-acre facility has been strategically planned to have the capacity to manufacture up to 150,000 vehicles annually during its initial phase. However, there has been a slight delay in the timeline, and the factory is now expected to commence operations in 2025, a year later than its original target of 2024.

VinFast’s CEO, Le Thi Thu Thuy, expressed optimism about the potential of the U.S. market for electric vehicles (EVs) due to the growing EV infrastructure and regulations that aim to transition major cities to EVs by 2035. For the ambitious project, VinFast has received substantial support from the state of North Carolina, securing incentives worth $1.2 billion. This financial backing will significantly aid the development of VinFast’s EV factory in the region.

Le acknowledged the growing competition in the U.S. market for electric vehicles. However, he remains optimistic about the prospects for VinFast, stating that there is still ample space for new players. Le believes that U.S. consumers are receptive to newcomers as long as they offer high-quality products. With a focus on delivering excellence, VinFast is determined to carve out its place in the American EV landscape.

As VinFast ventures into the U.S. electric vehicle (EV) market, it will inevitably face competition from established players like Tesla and BYD, along with traditional automakers shifting their focus towards hybrids and EVs. However, a key advantage for VinFast’s electric vehicles is that the ones produced at their new U.S. facility may qualify for up to $7,500 in U.S. tax credits. Presently, VinFast vehicles are ineligible for these credits since they are manufactured in Vietnam, not within the U.S. This new production location positions VinFast to potentially tap into the benefits of these tax incentives, further strengthening its competitiveness in the American EV market.

In a strategic move, the company is offering its VF 9 model at a substantial discount compared to the comparable Tesla Model X. According to Motor Trend, prices for VinFast’s VF 9 are anticipated to start around $85,000 for the Eco model, while a Tesla Model X typically costs approximately $100,000. This competitive pricing places VinFast’s VF 9 in an appealing position for potential buyers seeking an electric SUV at a more affordable price point compared to the well-established Tesla offering.

Le emphasized that VinFast’s core strategy has been consistent from the outset, focusing on delivering premium-quality products at affordable prices while prioritizing exceptional customer service. This steadfast approach remains true as the company expands into the U.S. market. Notably, VinFast stands out as the sole provider offering a diverse lineup of vehicles, ranging from compact city cars priced at around $12,000 to full-size three-row SUVs like the VF 9, set to hit the U.S. market later this year. This diverse range of options caters to a wide spectrum of customers, reinforcing VinFast’s commitment to accessibility and excellence in their product offerings.

VinFast’s foray into the U.S. market has encountered some challenges along the way. One notable setback was delayed deliveries to its initial customers in May, attributed to a software issue. Additionally, the company had to make adjustments by reducing its U.S. headcount in February. Despite these obstacles, VinFast continues to persevere in its U.S. expansion efforts, working diligently to overcome challenges and establish a strong presence in the competitive American automotive landscape.

Le explained that VinFast initiated a recall of their vehicles due to a potential issue with the screens momentarily going blank. As a precautionary measure, the company promptly conducted an over-the-air software update to address and resolve the concern. Although the recall was announced, it was ultimately resolved through the software update, ensuring the vehicles’ safety and functionality.

In addition to this, in May, VinFast disclosed its intention to list on the U.S. market through a merger with a special purpose acquisition company (SPAC) called Black Spade Acquisition Co. This strategic move is part of VinFast’s plan to further expand its presence and opportunities in the American automotive market.

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