VinFast breaks ground on its U.S. auto plant in North Carolina

Vietnamese automaker VinFast broke ground on its assembly plant in North Carolina, where it plans to build three EV crossovers starting in 2025, a year later than originally forecast.

VinFast, which began selling its VF 8 crossover in California earlier this year, said it's investing up to $2 billion in the project's first phase at an 1,800-acre site near the state capital, Raleigh.

"In the initial phase, the factory will focus on building VinFast's VF 7, VF 8 and VF 9 electric vehicles with an expected production capacity of 150,000 vehicles per year," the automaker said in a press release. "Future expansion and future updates for the factory will be identified in the next phase and will be announced later."

Last year, VinFast said the total investment over four years would reach $4 billion.

VinFast said the project, in the Triangle Innovation Point industrial park, is supported by a $1.2 billion incentive package from the state government in addition to local government support.

"North Carolina's skilled and diverse workforce is our greatest strength, and we have the largest manufacturing workforce in the Southeast," said Gov. Roy Cooper in the Friday press release. "This VinFast factory will create thousands of good-paying jobs in our state."

North Carolina landed the VinFast project after missed efforts to attract other car manufacturers to the state for many years.

VinFast is a new automaker, launching its first combustion vehicles in its home market in 2019. The automaker began selling its first EV locally in late 2021 and shifted to EVs entirely last year.

So far, it's been slow going in the U.S. market.

Registration data from Experian showed only 128 registrations for the VF 8 in the first five months of the year. VinFast launched the VF 8 in California first because it's the biggest EV market in the country by far. It plans to expand to other U.S. states in the near future, the company said. VinFast also sells the VF 8 in Canada.

A VinFast spokesman said in an email to Automotive News that Vinfast delivered more than 350 vehicles in the first half of the year and that registration data often lags sales data. He also said that VinFast did not deliver its first vehicles until early March and had a recall in May to fix a screen problem in the first shipment of vehicles from Vietnam.

In total, VinFast has shipped nearly 2,000 VF 8 models to the U.S. and will soon receive the first shipment of the larger, three-row VF 9 crossover. It will also soon open reservations for the smaller VF 6 and VF 7 models, the spokesman said last week.

VinFast faces a difficult EV market in the U.S. due to mid-January price cuts by Tesla, particularly for its Model Y crossover that competes directly with the VF 8. Likewise, Ford followed Tesla by cutting prices for its Mustang Mach-E, also a compact EV crossover.

VinFast is financing its expansion to North America and other markets with support from parent company Vingroup, a conglomerate in Vietnam. The automaker is also planning to list shares publicly in the U.S. through a merger with special purpose acquisition company Black Spade Acquisition Co. in the coming months, Reuters reported.