EV startup VinFast officially delays U.S. factory launch

Vietnamese electric vehicle manufacturer VinFast is pushing back the launch of its U.S. factory to 2028, citing challenges in the global EV market.

Why this matters: VinFast is far from being the only car maker to renege on an ambitious EV facility launch date, as even the most optimistic brands like Hyundai have done much the same in recent years. However, the company’s peculiar history and questionable sales numbers mean there’s a lot more to this story than meets the eye. 

What happened: On July 12, the EV brand said it would delay the opening of its North Carolina factory, originally scheduled to launch next year, to 2028. It attributed the decision to headwinds relating to the economy and “the global EV landscape.”

• “We have adopted a more prudent outlook that is carefully calibrated to near-term headwinds, taking into full consideration the realities of market volatility and potential challenges,” explained Madame Thuy Le, Chair of VinFast’s board of directors and former CEO. 

• Madame Thuy Le went on to emphasize that the company was still well-positioned “to meet the evolving needs of the dynamic global EV market.”

Between the lines: The news comes just three months after the company promised investors it remained on track to open the facility in 2025, during its quarterly earnings call. Foreign automakers are heavily incentivized to build EV production campuses in the U.S., however construction at the site had made little progress at the time of this confirmation.

The intrigue: While the postponement is neither exclusive to VinFast nor surprising given the downturn in EV sentiment, those who have been following VinFast will know it faces a “unique” set of challenges.

• VinFast’s first U.S. release, the VF8 luxury SUV, received an avalanche of negative reviews following the first batch of deliveries. Drivers complained of malfunctioning features and confusing design decisions.

• Another controversy came after the company’s (unaudited) 2023 sales released this February, in which the automaker claimed to have sold close to 35,000 units globally. However, SEC filings, first reported on by Reuters, revealed that around 70% of these deliveries had gone to the various subsidiaries of VinGroup, VinFast’s parent company. 

• This leaves roughly 10,500 units in actual consumer sales, and of these, only 265 had made their way into the hands of American buyers by the end of December 2023.

Taking a step back: Despite its controversies, VinFast does have a lot going for it. For starters, the company has no shortage of money. It is backed by Vietnam’s richest conglomerate, itself run by the country’s first billionaire, Pham Nhat Vuong.

And, unlike other EV competitors in the U.S., the brand has chosen to sell its products through dealerships rather than corporate-owned outlets, a play that served other foreign automakers extremely well. Another fact to consider is that the brand’s poor product quality is largely associated with software, which seems to be the most prevalent complaint among EV owners. This means that any issues could be fixed through over-the-air software updates, a relatively fast and easy process.

Bottom line: But whatever the brand has going for it, it faces an undeniably difficult battle in the years ahead. A nearly four-year delay in opening its first U.S. facility only further handicaps its ability to obtain any sort of relevancy outside its domestic market.

Become an automotive insider in just 5 minutes.

Get the weekly email that delivers transparent insights into the car market.

Join 70,000 others now, it's free:

Thinking about buying a used car? Bumper.com's vehicle history reports can give you essential information about a vehicle's past, including damage history and title history.

Plus, you can find the estimated market value of a vehicle to help ensure you're getting a fair deal.

Visit Bumper.com to explore our reports and help ensure you have the information necessary to make a well-informed purchase.

Avoid unexpected surprises and shop smarter with Bumper.com. Search for the details you need to confidently find your next vehicle.