VinFast's bold ambitions to sell electric cars to consumers in the US have suffered another setback with production at its as-yet-unbuilt facility in North Carolina now not expected to start until 2025.
The Vietnamese company had most recently said it planned to start trial production at the plant by 2024. Earlier this week a company spokesperson said VinFast had "received the air permit and we are preparing for sub-contractors bidding and will start the construction soon."
An updated filing for VinFast's planned U.S. initial public offering released Friday however said that commissioning of the facility is targeted for 2025.
"Pre-construction work for phase one commenced in the third quarter of 2022, with commissioning targeted for 2025," the filing said. "Phase one of the facility is expected to have an initial capacity of 150,000 vehicles a year" rising to 250,000 cars upon completion of phase two.
Tesla Inc.'s factory in China, by way of comparison, pumps out around 70,000 cars a month.
VinFast said to Bloomberg News that the delay was because "we need more time to complete administrative procedures."
That delayed timeline also means VinFast won't be able to take advantage of tax credits provided for under President Joe Biden's Inflation Reduction Act. The IRA EV tax credits are only eligible for electric cars that are made in the US. Currently, VinFast is making its electric cars at a factory north of Hanoi and putting them on a ship.
"If purchases of our EVs are not able to qualify for tax credits under the IRA, demand for our EVs may decrease," VinFast said in the filing.VinFast's latest pre-IPO filing also showed the company lost $2.1 billion in the 12 months ended Dec. 31 versus around $800 million in 2020 and a deficit of $1.4 billion in 2021. Revenue last year from vehicle sales was just $525 million, down from about $586 million in 2021.
VinFast is part of Vingroup JSC, owned by billionaire Pham Nhat Vuong, who has a net worth of around $4.1 billion.
As of the end of last year, Vingroup, its affiliates and external lenders had pumped about $8.2 billion into VinFast. Vuong has no plans as yet to personally invest any more money in VinFast, the carmaker's Chief Executive Officer Le Thi Thu Thuy said in February.
The EV maker's owners and lenders had invested about $7.5 billion to fund operating expenses and capital expenditures as of September, an earlier pre-IPO filing showed.
The cars that were shipped over from Vietnam started to be delivered to US customers this month. There were 45 so-called VF 8 City Edition electric SUVs delivered to buyers and VinFast said the vehicles will continue be delivered to customers at VinFast's stores or through a home delivery service. Some 999 cars are expected to be handed over in total.
Responding to questions from Bloomberg about some cars not starting upon arrival in the US, a company spokesperson said "some vehicles might have run out of batteries and need to be recharged when they arrived in the US. This is normal thing."
VinFast says it has around 12,000 pre-orders for the VF 8 and VF 9 models.
VinFast said in its latest filing that the City Edition cars, which have a limited driving range, were the first version of the VF 8 to go through relevant testing and approval process in the US and therefore were available sooner than the VF 8 with enhanced driving range.