“Newcomer” welcomed by the US government
VinFast has attracted the attention of North Carolina when the company is looking for a location to build a factory in the US.
State officials have been trying to attract a car manufacturer to establish a plant in Chatham County for many years. They have spent billions of dollars to bring a startup company from Vietnam with big plans despite its young age.
VinFast breaks ground on the factory in North Carolina, USA in July.
VinFast – a newly established electric car company for 6 years, has made rapid progress by launching modern-designed car models through collaboration with “giants” like BMW and top Italian designers, as well as successfully recruiting talents in the industry. VinFast is expected to compete with Tesla and other major US car brands in the domestic market.
The Governor of North Carolina, Roy Cooper, said his administration praised VinFast’s decision to build a factory and emphasized that this is the largest economic development project in the history of the state. US President Joe Biden also viewed this as “the latest evidence of the effectiveness of his economic strategy”.
VinFast’s bold decision to list on the Nasdaq stock exchange, along with the company’s ambitious plans, has attracted a lot of attention. In August this year, VinFast’s stock price soared, pushing the company’s market capitalization to exceed the total value of Ford and GM combined.
With a large car manufacturing plant in operation in Vietnam, VinFast has sold about 10,000 electric cars worldwide in the first 6 months of this year. VinFast said the company had to call for large investments as a new “newcomer” joining the automotive industry.
Support for VinFast is evidence of the US government’s policy to stimulate domestic production with clean energy technology. The US has allocated tens of billions of dollars to support electric car manufacturers, solar energy batteries, and mineral processing. State and local governments are also promising financial support for these activities.
Currently, VinFast has not received a federal loan but is benefiting from the incentives of the state and county, including subsidy payments and hundreds of millions of dollars from the state to improve roads and infrastructure near the new factory location.
Governor Cooper told The Wall Street Journal that he trusted VinFast’s commitment. With an electric car factory in Chatham County, North Carolina has become the focus of the clean energy economy.
VinFast listed on Nasdaq (US) since August this year.
Global CEO of VinFast, Le Thi Thu Thuy, said the company is confident in its attractiveness in key markets. According to her, the US is fond of brands that rise from zero and have the courage to compete with big names.
An advantage of VinFast in expanding in the North American market is that the brand does not come from China. Well-known Chinese electric car brands such as BYD are expanding globally. However, most of them have not yet entered the US market due to high import duties and escalating US-China tensions.
In the US, VinFast has been welcomed by lawmakers from both parties. In addition, Vietnam is considered a friendly trading partner of the US.
Long-term commitment to the US market
Vingroup founder, billionaire Pham Nhat Vuong, aspired to build Vietnam’s first global brand when he decided to invest in VinFast. Vuong – Chairman of Vingroup and Forbes’ richest person in Vietnam – controls over 98% of VinFast’s shares.
Vingroup is investing heavily to learn expertise and foreign technology. The first CEO of VinFast, Jim DeLuca, has had 37 years of experience at General Motors, where he held the position of Executive Vice President of Global Manufacturing.
The company has completed the factory and successfully developed three car models in just 21 months, much faster than traditional car manufacturers. However, since last year, VinFast has stopped producing internal combustion engine cars and switched to electric vehicles.
The first shipment of VinFast cars exported to the US.
VinFast cars are currently produced at a highly automated complex in Hai Phong. Many components are manufactured in-house. The factory uses very little manual labor thanks to owning more than 1,000 robots, which take on most of the heavy tasks, such as welding car parts together. VinFast said this factory sets it apart from competitors with significantly lower labor costs.
VinFast also said that its exported electric cars have a price advantage thanks to free trade agreements between Vietnam and markets such as the European Union. VinFast is currently selling cars in the US, Canada, Vietnam, and will soon enter the EU market.
The capacity of VinFast’s factory is up to 300,000 electric vehicles per year, but the company plans to produce only 40,000-50,000 cars this year. A major partner of VinFast is the shipping company GSM, which has greatly contributed to promoting electric cars in the Vietnamese market.
“We want VinFast electric cars to be present on the streets of Hanoi as quickly, as much, as possible,” said David Mansfield, VinFast’s CFO.
In July, the company broke ground on its factory in North Carolina. The factory is expected to start producing electric cars in 2025. The company said the US factory will be similar to the Vietnam factory, with high automation and a system of suppliers in the area to maintain flexibility. Customers who buy VinFast cars manufactured in the US may be eligible for a $7,500 electric vehicle tax credit.
In the US market, VinFast is positioned as a premium brand. The VF 8 City Edition model has a starting price of nearly $50,000. The company has opened 13 showrooms in California and plans to open 3 more showrooms.
“If we want to be part of the US economy, want to affirm that VinFast will have a long-term commitment to this market, we will have to make significant investments,” said Thuy.
According to The Wall Street Journal
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