VinFast (VFS.US), the Vietnamese electric auto manufacturer, is expanding in Asia despite the global slowdown in EV demand and lukewarm start in the US. VinFast founder Pham Nhat Vuong said on Wednesday that the company expects its India plant to start production in the first half of next year, six months ahead of schedule. The company will also start building the Indonesian plant in the next two months.
Although VinFast is struggling to establish itself in the highly competitive EV market, the company has set ambitious growth plans. During the first three months of this year, VinFast delivered only 9,689 cars, well below the pace needed to achieve its target of 100,000 cars per year.
VinFast delivered a total of 34,855 cars in 2023, but most of them were delivered to related parties. In addition, the company went public on the US stock market in August last year, with the share price soaring more than 700% in just two weeks, but then plummeted more than 90% from its highest point.
Pham Nhat Vuong is not worried about the global slowdown in demand for EVs. He said, "I'm not concerned about the sales of EVs. The growth of EVs is inevitable."
VinFast signed an agreement with the Indian state of Tamil Nadu in January this year to invest up to $2 billion to seek entry into India, one of the world's largest auto markets. The Indian plant started construction in February this year with an initial investment of $500 million.
Pham Nhat Vuong also said that the company's Indonesian plant is scheduled to start production by the end of 2025, a year earlier than originally planned. He said the initial production capacity of the Indian and Indonesian factories was 50,000 vehicles per year and they had the capacity to increase to 300,000 vehicles per year based on market demand.
VinFast is still on track to start vehicle production at its North Carolina factory. Construction of the plant began in July last year. The company previously said the plant's initial production capacity is expected to be 150,000 vehicles per year and will start production in 2025.
However, VinFast is weighing investor concerns about high factory construction costs under high interest rates and whether to postpone production instead of sticking to the current timetable to meet US EV demand. But Pham Nhat Vuong said there are no plans to reduce the plant's production capacity or shrink its footprint.
As of the end of March, VinFast had net debt of around $2.9 billion and cash and equivalents of $123.3 million. The company expects capital expenditures to reach $1 billion to $1.5 billion in 2024 and will finance the spending through a combination of debt and equity funding. Pham Nhat Vuong said the company is in talks with financial investors and will consider industry partners who can help it grow. But he added that he does not intend to "casually" raise funds or accept high-interest financing.