VinFast, a Vietnamese manufacturer, announced on Tuesday that it has inked a preliminary agreement to invest $2 billion in the construction of a factory in North Carolina to manufacture electric buses, sport utility vehicles (SUVs), and batteries for electric vehicles.
Construction is scheduled to begin this year, pending receipt of all necessary permissions, and is slated to be completed by July 2024. Vinfast stated that the plant's initial capacity will be 150,000 units per year.
The unit of Vietnam's largest conglomerate Vingroup announced it intends to invest a total of $4 billion in its first plant complex in the United States.
VinFast has begun accepting global pre-orders for two electric SUVs, with the objective of starting deliveries in the fourth quarter.
"With a manufacturing facility located in the United States, VinFast can control prices and accelerate product delivery, making our EVs more accessible to customers," said Nguyen Thi Thu Thuy, Vingroup vice chairman and VinFast Global CEO.
President Joe Biden applauded the unveiling of the 800-hectare factory in Chatham County, which will also manufacture electric buses and electric vehicle batteries, describing it as "the latest demonstration of my economic policy in action."
"It builds on recent promises by firms like as General Motors, Ford, and Siemens to reinvest in America and create employment," said Biden, who previously set an audacious aim of having half of new car sales be electric by 2030.
This will be North Carolina's first automobile plant, and the governor's administration stated it is the largest economic development announcement in the state's history.
VinFast stated that the VF8 sport SUV is priced starting at $41,000 in the United States. In comparison, a Tesla SUV costs approximately $63,000. VinFast intends to sell 42,000 electric vehicles globally this year.
VinFast is placing a large bet on the U.S. market, where it expects to compete with established manufacturers and startups by offering affordable electric SUVs and a battery leasing model.
Other electric car startups, including as Rivian and Lucid, have cut their production plans this year in response to supply chain disruptions caused by the coronavirus, which dragged down their stock prices.
Elon Musk, Tesla's CEO, stated last year that "it is extraordinarily difficult to achieve mass production at a reasonable unit cost."
VinFast, which became Vietnam's first fully-fledged domestic automaker in 2019, intends to switch to all-electric vehicle production by late 2022.
Outside of North America, the company is aiming to establish a facility in Germany, the company announced in January.
