VinFast losses surpass $5 billion as NC-bound automaker wants EVs in US dealerships
The new Vietnamese electric vehicle maker VinFast continues to spend considerably more than it earns as it attempts to secure a foothold in dozens of international markets, including the United States.
The now-public company released its latest earnings Thursday, showing it lost nearly $623 million this summer. VinFast is on pace to lose more money in 2023 than it did in either 2022 ($2.1 billion) or 2021 ($1.3 billion).
Net losses for the automaker have exceed $5 billion since 2021, the year it transitioned away from producing gas-powered cars in Vietnam and toward electric SUVs for global customers.
Key to VinFast’s global plans will be its first foreign factory, a future $4 billion manufacturing and assembly plant in Chatham County. The site is near the small town of Moncure, about 30 miles southwest of Raleigh. VinFast has pledged to employ at least 7,500 people at the site by 2027.
By projected job creation, it is the largest incentive-backed private economic initiative in North Carolina history.
If it achieves its hiring and investment targets, VinFast will receive a state incentives package worth $854 million over 32 years and Chatham County would chip in another $400 million.
VinFast officially broke ground on the site in late July and, after a postponement, now hopes to have the plant running by 2025.
Plans to obtain more cash
In a separate filing earlier this week, VinFast acknowledged it “will require significant additional capital to support business growth.”
Over the next six months, the 6-year-old company expects to obtain $1.2 billion in additional funding from three sources: its parent company Vingroup, Vingroup Chairman Pham Nhat Vuong, and by selling 46 million shares of company stock.
As of midday Thursday, a share of VinFast stock was selling for $8.28. VinFast went public on Aug. 15 and is now required to submit regular financial reports to the U.S. Securities and Exchange Commission.
While the scale of VinFast’s losses is high, the fact the company is burning cash is not unexpected to its leaders. In mid-2020, Vuong said his car company anticipated spending more money than it took in for the next three to five years as it expanded its geographic and EV scope.
Between July and September, the automaker delivered 10,027 electric vehicles, an increase of 5.2% from the previous three-month period. A large portion of this jump was from increased sales in its home country, the company said.
Global expansion remains the goal, however. VinFast currently has 126 showrooms worldwide and hopes to have a presence in as many as 50 countries by the end of next year. As of July, only around 350 VinFast cars were on the road in the United States.
“We started to see a sales increase in September in North America, particularly in Canada,” the company noted in its Oct. 5 release.
Getting VinFast into NC dealerships
This spring, critics widely panned the first VinFast model available to U.S. drivers, a five-seat SUV called the VF8. But the automaker still believes it will find success in the country.
This week, VinFast announced plans to partner with dealers across a dozen states to increase access to its vehicles. So far, VinFast has only sold directly to customers. As of Sept. 30, the company said it had received applications from 27 U.S. dealers who have more than 100 locations, including in North Carolina.
Globally, the company said it will especially target India and Indonesia as two markets with “tremendous potential for increased EV adoption.”
This story was originally published October 5, 2023 at 12:34 PM.
