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Vietnam's VinFast ships first electric vehicles to U.S. customers

Stock Markets Nov 25, 2022 07:21AM ET
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© Reuters. FILE PHOTO: People walk next to a VinFast logo on a screen during the press day at the Los Angeles Auto Show in Los Angeles, California, U.S. November 17, 2022. REUTERS/Mike Blake
 
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By Phuong Nguyen

HAI PHONG, Vietnam (Reuters) -Vietnam's electric vehicle maker VinFast said on Friday it had shipped its first batch of 999 cars to the United States, capping a five-year bid to develop an auto production hub in the Southeast Asian country for markets in North America and Europe.

The first cars are expected to be handed over to customers by the end of December, the company said.

VinFast Chief Executive Le Thi Thu Thuy said some of the VF (NYSE:VFC) 8 electric SUVs being shipped on Friday would be sent to U.S. car subscription service Autonomy but the majority would go to retail buyers who have ordered the car.

Thuy said VinFast expected to be able to ship a second batch of cars to the United States, its first export market, around January.

VinFast is in the process of building an electric vehicle plant in North Carolina that is awaiting final regulatory approval from local officials.

Thuy said the company expected to start production at the North Carolina factory from July 2024 and that electric vehicles built there would qualify for incentives under the terms of the Inflation Reduction Act signed by U.S. President Joe Biden.

The Inflation Reduction Act, as currently written, requires automakers to have 50% of critical minerals used in EV batteries come from North America or U.S. allies by 2024, rising to 80% by the end of 2026.

Major automakers have said those targets are unrealistic and it was not immediately clear how VinFast would meet the sourcing requirements.

"The IRA came as a surprise to all of us but it doesn't really impact our strategy in the U.S.," Thuy told Reuters. "As soon as we start manufacturing cars in the U.S., our customers will be eligible (for) the tax incentive."

VinFast said last week that Autonomy had ordered 2,500 electric vehicles, its largest corporate order to date. VinFast has said it has almost 65,000 orders globally in total and expects to sell 750,000 EVs annually by 2026.

The North Carolina factory project is running months behind schedule, based on the company's initial targets, and the first shipment of EVs built by VinFast was short of the initial goal to deliver as many as 5,000 cars built at its factory in Haiphong by December.

VinFast officials said the number 999 for the vehicles shipped in the first batch had been chosen because it is considered a lucky number in Vietnam.

"There is no luckier number than 999," Thuy said. The Panamanian-chartered transport ship used to send the first shipment of VinFast EVs had the capacity to carry up to 2,000 vehicles, officials said.

Shares in VinFast's listed parent company, Vingroup, which also has property and resort development businesses, were up 5.41% on Friday morning.

Vietnam's VinFast ships first electric vehicles to U.S. customers
 

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