Vietnamese automaker VinFast announced Friday it will delay the production launch of its U.S. assembly plant until 2025.
It’s the latest in a series of delays the brand has experienced in recent months, VinFast pushing back deliveries of its first imported product line, while also briefly postponing a planned IPO meant to help fund product development, as well as the plant it intends to set up in North Carolina.
The original goal was to have the plant roll out its first products by July 2024. The automaker blamed the delay on procedural problems.
“We need more time to complete administrative procedures,” VinFast said in a statement released on Friday.
A multi-state production plans
The automaker has laid out an initial plan calling for a $2 billion investment in North Carolina’s Chatham County. The 1,759-acre plot will initially feature an assembly line for one or more battery-electric vehicles. But the eventual investment could rise to as much as $6.5 billion, the automaker said when the project was announced in late March 2022.
The long-term plan would give it capacity to produce 150,000 passenger vehicles annually, VinFast officials said at the time. They said 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 last March.
But the project has become even more important in recent months, according to industry analysts, as a result of changes made to the U.S. EV incentive program. To provide up to $7,500 in federal tax credits, a manufacturer must not only assemble its vehicles in the U.S. but also produce its batteries and source their raw materials locally.
VinFast has to go through a series of steps before work on the North Carolina plant can begin in earnest. It received an Air Permit from local authorities last month, Reuters reported, though it must still win a permit from the U.S. Army Corps of Engineers showing it can “minimize damage to water quality and wetlands,” the news service said.
The carmaker has received $1.3 billion in incentives from North Carolina — the largest such package in the state’s history.
But VinFast has fallen behind schedule, originally having planned to break ground on the factory complex last year.
The automaker’s IPO has also been delayed due to concerns about market conditions. After lending significant financial support to EV startups during the past decade, investors have been pulling back of late.
VinFast also delayed several times the delivery of its first vehicle to an American customer. That was supposed to happen late in December but the first 45 EVs were handed over just last week.
The midsize VinFast VF 8 is the first vehicle the company plans to start selling in the States. It will follow with the bigger VF 9 sometime in mid-2023, at least if that plan holds close to schedule. Two smaller models, the VF 6 and VF 7, could also reach American showrooms before the end of this year or by early 2024.