Vietnamese electric vehicle maker, VinFast, is moving forward with its plans to start production in the United States by 2024, amid recent restructuring efforts in its North American operations, CNBC first reports.
The first Vietnamese automaker, Vingroup, is the automotive division of Vietnam's largest conglomerate, Vingroup. Recently, Vingroup went through a restructuring process that included cutting jobs in the U.S. and Canada in order to streamline its operations. Read more.
Recent Strategic Business Consolidation
VinFast announced in late January the consolidation of its Canadian and US strategic business and management operations into a single unit called VinFast North America.
The move is intended to increase resource efficiency and allocation while improving the company's operational and financial performance.
VinFast CEO, Le Thi Thu Thuy, stated in an interview with CNBC that "after last year's observation, we see a lot of similarity in the two markets, and consolidating the two markets will allow us to be stronger and more agile."
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The company shipped its first batch of cars to the U.S. in November and has received about 12,000 pre-orders for the vehicles. Even though the restructuring process has caused recent delays in deliveries, the CEO has said that the layoffs will not change the plan for the company to start trial production in 2024.
Going Public
The company has already given notice of its intention to go public in the United States, and on December 6, 2022, the company filed for an initial public offering.
However, neither the precise number of shares to be traded nor their prices have been made public at this time.
The CEO stated that the organization is keeping a close eye on the level of market activity and is prepared to move forward with the IPO when the market becomes more cooperative.
According to TechCrunch, VinFast also received $1.2 billion in incentives at the same time as the IPO announcement, to build a factory in North Carolina, where the automaker hopes to start producing cars by July 2024.
Even more, VinFast has guaranteed potential American customers a $7,500 discount if they wait to purchase an EV that is eligible for American EV tax incentives.
Expansion Plans
VinFast intends to expand its operations outside of the United States in the future, with a focus on countries like Germany, France, and the Netherlands in Europe. According to the CEO, they intend to concentrate the production of electric vehicles and their essential components in the United States in the long run.
The North Carolina plant, where production is set to commence in 2024, has an annual production capacity of 150,000 electric vehicles. However, it is worth noting that VinFast vehicles do not currently qualify for the $7,500 tax credit in the U.S. because they are not built in the country. Prices for the 2023 VinFast VF 8 model start at $40,700.
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