Despite obstacles in the cutthroat EV market and waning demand worldwide, Vietnamese electric vehicle manufacturer VinFast continues to grow throughout Asia, setting up new plants in Indonesia and India.
VinFast Auto Ltd., a Vietnamese electric vehicle manufacturer, continues to expand throughout Asia. Despite the declining demand for EVs worldwide and the company’s lackluster US debut, founder Pham Nhat Vuong is unfazed. Six months ahead of schedule, VinFast intends to open its India factory in the first half of 2019.
VinFast and the Indian state of Tamil Nadu inked a deal in January that calls for up to $2 billion in investments. The company aims to enter one of the largest vehicle markets globally. Beginning in February, a $500 million initial investment will be made on the factory.
These audacious expansion strategies are being announced as VinFast battles to establish itself in the cutthroat EV industry. In the first three months of the year, the automaker delivered just 9,689 automobiles, well short of its yearly goal of 100,000. 34,855 vehicles were sold by it in 2023, the majority of which went to family members. The stock had a stunning debut on the US market in August, rising over 700% in just two weeks. However, the shares fell back to earth, losing over 90% of their high value.
Originally scheduled to start in 2026, production at the Indonesia plant is expected to start by the end of 2025. According to Vuong, the initial manufacturing capacity of both factories will be 50,000 vehicles, with the potential to increase to 300,000 annually based on market demand.
VinFast, which started shipping in the US last year, will have difficulty building a successful international brand. Tesla is lowering costs in response to consumers’ declining interest in electric vehicles, while Chinese rivals are expanding their exports of less expensive EVs.
The business is still on schedule to begin producing automobiles at its factory in North Carolina, where work started in July of last year. The plant is scheduled to begin production in 2025, with an initial capacity of 150,000 automobiles annually. But in light of the high loan rates, VinFast evaluates investor worries regarding the factory’s costs and decides whether to postpone the opening. Vuong continues, “There are no plans to scale down the factory’s footprint or reduce its production capacity.”
VinFast has around $2.9 billion in net debt at the end of March. The amount of cash and cash equivalents is $123.3 million. The company projects that its $1 billion to $1.5 billion in capital expenditures in 2024 will be funded by debt and equity.
According to Vuong, the company is in discussions with potential investors and would be open to working with an industry partner to support its expansion. But he’s not wanting to raise money “carelessly,” and he’s not going to take high-interest loans.
The business operates a cutting-edge plant in Haiphong, Vietnam. In addition, VinFast has established a joint venture with Gotion High-Tech Co. in Vietnam and wants to build a battery manufacturing plant in India.
