Vietnamese OEM VinFast invests in US plant
VinFast, the Vietnamese electric vehicle manufacturer, is set to commence the construction of a new factory in North Carolina, U.S., after experiencing delays. The $1.2 billion project will be initiated on July 28 with support from the U.S. state through an incentive package. Despite postponing the start of operations until 2025, VinFast's CEO, Le Thi Thu Thuy, remains optimistic about the future of the auto plant.
The company's expansion efforts have focused on the U.S., where it plans to go public through a merger with Black Spade Acquisition, a special purpose acquisition company founded by Lawrence Ho, a prominent Macao casino magnate. VinFast shares will be traded on NYSE American if the deal is finalized. Black Spade has $29 million left in its trust after $147 million worth of shares were redeemed, and they have until July 20, 2024, to complete the merger.
While VinFast's entry into the U.S. market shows promise, there have been some challenges, including a recall of its initial batch of electric vehicle exports to the country due to a software issue in May.
The new factory in North Carolina will cover 1,800 acres and have an annual production capacity of 150,000 vehicles, primarily serving the North American market. The company has already made its first shipment to Canada, consisting of 781 SUVs starting at nearly $40,000, along with battery subscription fees.
Despite the recent announcement, there was no mention of the battery manufacturing plant, which VinFast had previously indicated would be built in North Carolina. Furthermore, the company aims to export electric vehicles to Europe in the latter half of 2023, as mentioned in a filing with the U.S. Securities and Exchange Commission on June 15.
VinFast acknowledges potential risks, such as delivery delays leading to cancellations, customer dissatisfaction, or negative publicity, in their SEC filing. Nonetheless, the company points out the advantages it enjoys, including substantial financial and strategic support from Vingroup, Vietnam's largest conglomerate, and a leading market share in electric vehicles within Vietnam.
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