In defiance of a global slowdown in electric vehicle demand, Vietnamese automaker VinFast Auto (NASDAQ:VFS) is accelerating its expansion across Asia. The company's founder, Pham Nhat Vuong, is undeterred by the challenges faced by VinFast in the U.S. market.
What Happened: Despite a sluggish start in the U.S. and a general decline in global EV demand, VinFast is pressing on with its ambitious expansion plans. The company is set to open its India factory ahead of schedule, with construction of an Indonesia plant also commencing within the next two months, reported Bloomberg on Wednesday.
VinFast's recent struggles in the highly competitive EV market are evident in its delivery figures. The company only managed to deliver 9,689 cars in the first quarter of 2024, a far cry from its annual target of 100,000. The situation was further compounded by a dramatic 90% drop in its stock value following its U.S. market debut in August.
Despite these challenges, Vuong remains optimistic about the future of EVs, stating, "The growth of electric vehicles will be inevitable." The company has already begun work on its Indian plant, with an initial investment of $500 million. The Indonesia site is expected to start production by the end of 2025, a year ahead of schedule.
Vuong dismissed worries about declining global EV demand, a concern that has unsettled established competitors like Tesla Inc and Volkswagen. "I'm not worried about electric vehicle sales," he said in the interview. "The growth of electric vehicles will be inevitable."
Why It Matters: VinFast's resilience in the face of a challenging market can be attributed to its founder's unwavering commitment. Earlier in the year, Vuong, who directly owns 18% of Vingroup's shares, announced plans to inject an additional $1 billion from his personal wealth into the Nasdaq-listed electric vehicle manufacturer.
Despite the financial risks faced by VinFast, Vuong has remained steadfast in his support for the company's global ambitions. This determination was further evidenced by the $5.7 billion loss incurred by VinFast over the past three years, a situation exacerbated by the company's reliance on sales to related entities and a declining global EV market.
Despite these challenges, VinFast has continued to expand its operations, with Vuong taking the helm as CEO in a leadership overhaul in 2021. His unwavering commitment to the company's success has been a driving force behind VinFast's continued expansion, despite the obstacles it has faced.
Price Action: VinFast Auto closed at $3.91 on Tuesday, marking a minor decline of 1.51% for the day. In pre-market trading on Wednesday, the stock rose 0.26%. Year to date, the EV maker has experienced a substantial decrease of 44.54%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote