Vietnam to invest $2 billion in a US-based EV factory

Vietnamese automaker VinFast announced on Tuesday that it signed a preliminary deal to make an initial investment of $2 billion to construct its first U.S. factory in North Carolina.

VinFast’s factory investment will be to manufacture electric buses, SUVs, and electric vehicle batteries.

The company is owned by Vietnam’s biggest conglomerate, Vingroup, and it plans to make a total investment of $4 billion in its factory complex. VinFast became Vietnam's first completely domestic car manufacturer in 2019 and it plans to be an all-electric vehicle manufacturer by late 2022.

This will be North Carolina’s first car plant and it is the largest economic development announcement in the state’s history, the governor's office announced in a statement.

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VinFast’s factory will create a major manufacturing center on a 1,977-acre plot for phase 1 with 3 main areas: electric cars and buses production and assembly, EVs batteries production, and ancillary industries for suppliers.

U.S. President Joe Biden said the VinFast investment, which will create more than 7,000 jobs, is "the latest example of my economic strategy at work." 

"It builds on recent announcements from companies like GM, Ford, and Siemens to invest in America again and create jobs" added Biden, as he set an ambitious goal of making half of the new car sales to be electric vehicles by 2030.

First phase to be completed by 2024

The first phase of the investment is expected to be completed by July 2024 and the company will have the annual capacity of producing 150,000 vehicles, according to VinFast.

The company has begun accepting pre-orders globally for two electric SUVs and aims to begin delivering said vehicles in the fourth quarter of the year. VinFast aims to sell 42,000 electric vehicles globally this year.

The company also announced that prices for its VF8 sports SUV start from $41,000 in the U.S. Compared to Tesla’s SUV price at around $63,000, that's quite affordable. 

"With a manufacturing facility right in the U.S. market, VinFast can stabilize prices and shorten product delivery time, making our EVs more accessible to customers," said Nguyen Thi Thu Thuy, Vingroup vice-chair and VinFast Global CEO.

Let’s see if VinFast can achieve its goal of manufacturing 150,000 vehicles per year. Raw material costs have surged as the supply chain disruptions caused by COVID-19 pandemic still haven’t recovered, which increases the costs of production.