VinFast, Vietnam’s first high-volume automaker, plans to set up a new manufacturing facility in North Carolina with the eventual investment expected to reach $6.5 billion.
The factory is expected to become operational in 2024 and eventually will have the capacity to produce 150,000 passenger vehicles annually. It also will assemble electric buses, as well as batteries and motors. Employment could reach as much as 13,000.
“Having a production facility right in the market will help VinFast to proactively manage its supply chain, maintain stabilized prices and shorten product supply time, making VinFast’s EVs more accessible to customers,” Le Thi Thu Thuy, Vingroup vice chair and VinFast Global CEO, said ahead of the project’s formal announcement on Tuesday afternoon.
A rapid start
The automaker was founded in 2016 and based in Haiphong, the primary port city in northern Vietnam. It is part of the Vingroup, a conglomerate operating a diverse portfolio of businesses including schools, shopping centers, hospitals and resorts.
VinFast produced its first vehicle in 2019, a modified version of the BMW X5 SUV. But it announced a shift in direction during the LA Auto Show last November, planning to phase out vehicles using internal combustion engines in favor of battery-electric vehicles. It revealed two different models in Los Angeles and followed up with three more during a presentation at the Consumer Electronics Show in January.
The five SUVs cover what the industry refers to as the A, B, C, D and E segments, basically from subcompact to full size. The largest offerings were originally dubbed the VFe-35 and VFe-36 when unveiled in Los Angeles. The range will now go from VF5 to VF9. The four largest models, the VinFast VF6, VF7, VF8 and VF9, will be sold in the United States. The little VF5 will be limited to Europe and Asia, officials told TheDetroitBureau.
Learning a few key lessons
Taking a page from the playbook early on used by Japanese and South Korean automakers, VinFast plans to appeal to consumers with a value-oriented focus delivering lots of features at a relatively mainstream price. The VF8, for example, will start at $41,000, the VF9 for $56,000. Both those models will be produced at the North Carolina facility.
Production is set to begin on those models later this year. Early products will be shipped to the States from VinFast’s Haiphong assembly complex that will have a capacity of 950,000 EVs by 2026, according to a statement from the automaker.
“VinFast’s transformative project will bring many good jobs to our state, along with a healthier environment as more electric vehicles take to the road to help us reduce greenhouse gas emissions,” said North Carolina Gov. Roy Cooper.
As many as 13,000 jobs could be created if VinFast meets its target. The assembly plant itself is expected to cost around $2 billion, but the other projects VinFast has laid out could bring the total figure to $6.5 billion.
“The investment certainly declares their commitment to be part of this market,” said Stephanie Brinley, principal auto analyst for IHS Markit.
The Vietnamese startup will be just one of a number of EV wannabes, however. Tesla recently began production in Berlin and operates another new facility in Shanghai, as well as U.S. plants in California and Texas. In recent months, both Lucid and Rivian have launched production at factories of their own, and a number of other nascent EV makers hope to carve out niches in the U.S. market — though several, including Faraday Future, Byton and Lordstown Motors, are struggling for survival.
Companies like VinFast face a number of challenges, said Brinley, starting with the fact “It’s getting to be a crowded market,” especially as established automakers such as General Motors, Ford, Toyota and Volkswagen introduce their own EVs. So, said Brinley, “it’s going to be difficult to stand out.”