VinFast Faces Sales Challenges Amid North Carolina Factory Development

Feb 52 min read

VinFast, the Vietnamese electric vehicle manufacturer, is encountering significant hurdles in its sales efforts as it develops a factory in North Carolina. The company has recently delayed the opening of its Thai dealership network and reduced its sales targets, reflecting broader challenges in the global electric vehicle market.

Key Takeaways

VinFast has postponed the opening of its Thailand dealerships due to a slowdown in EV sales.
The company has delayed its North Carolina factory opening by three years, now targeting 2028.
VinFast's sales targets have been lowered from 100,000 to 80,000 units for the year.
Over 70% of VinFast's vehicle deliveries last year were to companies owned by its CEO.

Sales Struggles in a Competitive Market

VinFast's challenges are not isolated. The global electric vehicle market has seen a downturn, with major manufacturers like Ford, GM, and Tesla scaling back their ambitions. This has created a tough environment for newcomers like VinFast, which is trying to establish itself in a crowded marketplace.

The company has reported that more than 70% of the 35,000 vehicles it delivered last year were to companies owned by its CEO, Pham Nhat Vuong. This has raised concerns about the sustainability of its sales figures, as these transactions accounted for over 90% of its total sales revenue. Additionally, many of these vehicles have been found stored in fields, indicating a lack of consumer demand.

Factory Development Delays

VinFast's factory in North Carolina, which is expected to be a significant contributor to local employment, has also faced setbacks. The company has delayed the factory's opening from 2025 to 2028, citing the need to manage short-term spending more effectively. This delay comes despite state and local governments pledging over $1.2 billion in incentives to support the factory's development, contingent on meeting hiring and investment goals.

The construction of the factory has been slowed by permitting issues, although VinFast has recently filed the necessary permits to continue work. The factory is projected to have the capacity to produce 150,000 vehicles annually once operational.

Adjusting Sales Strategies

In response to its sales challenges, VinFast has begun to adjust its strategies. The company has signed leases with dealerships in the U.S. and is offering discount leases to attract customers. Despite the setbacks, VinFast remains optimistic, forecasting the delivery of 100,000 EVs this year.

However, the reality is stark: as of December, only 265 of the 3,118 cars shipped to the U.S. had been sold, and reservations for its two main vehicles have plummeted from an expected 65,000 to about 14,700.

Future Outlook

VinFast's future hinges on its ability to navigate these challenges effectively. The company is still targeting expansion into at least 50 countries by 2024, with plans to open a factory in India and an assembly plant in Indonesia. However, the current sales struggles and factory delays raise questions about its long-term viability in the competitive EV market.

As VinFast continues to develop its North Carolina factory and adjust its sales strategies, the coming months will be critical in determining whether it can overcome these hurdles and establish itself as a key player in the electric vehicle industry.

Sources

VinFast Delays Thai Dealerships Amid Global EV Sales Slowdown, MSN.
VinFast, an EV maker building a North Carolina plant, struggles to sell its cars, MSN.