VinFast Facing Multiple Setbacks, Founder Doesn’t Want to Spend More Money
Launching a new car company is never easy, let alone attempting to expand into other markets around the globe. Despite bold ambitions and a wealth of resources, Vietnamese automaker VinFast is getting a major reality check in North America.
In late January, the decision was made to combine its U.S. and Canadian operations under a single entity headquartered in Los Angeles, apparently in an effort to maximize efficiency. Earlier this month, VinFast cut around 80 jobs including its U.S. chief financial officer.
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As part of this restructuring, deliveries of the first VinFast vehicles in North America have been delayed because the software had to be updated and VinFast is awaiting certification from the EPA. Furthermore, construction of an assembly plant in North Carolina is slow to begin.
Now, VinFast CEO Le Thi Thu Thuy has told Bloomberg that company founder and chairman Pham Nhat Vuong has no plans to personally invest any more money.
VinFast, which started in 2017, is backed by Vietnam's largest industrial conglomerate, Vingroup. According to Bloomberg, VinFast's owners and lenders have so far invested more than $7.5 billion USD to fund its operating expenses and capital expenditures. The company lost $1.3 billion in 2021 and close to $1.5 billion in the first three quarters of 2022.
VinFast claims that Vingroup "has the ability and will continue to provide financial support sufficient to meet our needs for continued operation." However, that money is expected to come via debt and equity financing following VinFast's planned initial public offering.
The U.S. plant is scheduled to begin trial production by 2024. Until then, VF 8 and VF 9 units (not to mention the future VF 6 and VF 7) will come from Haiphong, Vietnam.
VinFast currently has eight stores open in Canada including four in Ontario, three in B.C. and one in Quebec. It has yet to receive its certification from Transport Canada, though. Once it does, VinFast will be able to provide full specifications (exact range figures are still missing, for example), offer test drives on public roads and start to convert reservations into orders. The first VF 8 deliveries in Canada are planned for April, the company says.