(Bloomberg) -- Vietnamese electric-vehicle maker VinFast said it will start building a factory in North Carolina this year.
The plant will be located in Chatham County's Triangle Innovation Point, Chief Executive Officer Le Thi Thu Thuy said in an emailed statement. It is expected to be operational in the second half of 2024 and the initial investment will be as much as $2 billion, she said. The announcement comes ahead of a planned VinFast U.S. initial public offering.
“We have started the design and are rushing to finalize the factory construction plan and target to start production from July 2024,” Thu said.
VinFast's founder Pham Nhat Vuong has committed $2 billion of his fortune to selling cars to Americans. It's a bold and potentially risky move given that many others have made splashy plans to invest heavily in EV manufacturing plants only to fail.
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The North Carolina factory is the first phase of a planned complex in the U.S. that Thuy said in November would have a total investment of as much as $6 billion. She didn't disclose the location at the time. A construction permit is still required, VinFast said in a statement Tuesday.
U.S. President Joe Biden tweeted a White House statement about VinFast's North Carolina plans, which it called a $4 billion investment that would create more than 7,000 jobs.
The facility will have capacity to produce 150,000 electric cars a year, and will also make electric buses and batteries, Thuy said. It will be VinFast's second vehicle factory after its one in the northern Vietnam port city of Haiphong. The company expects to begin production at its battery plant in the central province of Ha Tinh at the end of this year, she said.
VinFast aims to start delivering cars in the U.S., Canada, France, Germany and the Netherlands in late 2022. Prices for its VF8 and VF9 electric SUVs will range from $41,000 to $61,000. VinFast began domestic deliveries of its first electric cars in December.
Ken Foong, an analyst at Bloomberg Intelligence in Singapore, said in a Feb. 11 research note that VinFast's global sales of electric vehicles could drive long-term growth for parent Vingroup JSC.
Vingroup's shares rose 1.2% to a one-week high as of 10:07 a.m. in Ho Chi Minh City.
Thuy, who is also vice chairwoman of Vingroup, has said the company aims to sell a total of about 700,000 to 1 million EVs within five to six years. VinFast has received 50,000 orders globally for its VF8 and VF9 models, she said.
The target is ambitious compared with other, more established automakers. Chinese EV startup Nio Inc. only celebrated its 100,000th vehicle off the production line in April 2021 after almost three years.
Many have stumbled trying to implement similar plans. Fisker Automotive Inc. made hybrid cars before filing for bankruptcy after its battery supplier collapsed. As Fisker Inc., it is now planning a second EV. Coda Holdings Inc. sold fewer than 100 vehicles and Faraday Future Intelligent Electric Inc. ended up selling the land in Nevada where it was going to build a factory. A number of EV makers that went public via blank-check companies have also struggled.
VinFast began delivering gasoline-powered automobiles with BMW-licensed engines to Vietnamese consumers in 2019. It has said it will stop making gas-powered cars by the end of this year. VinFast sold 35,723 gasoline vehicles in Vietnam last year, according to the company. It sold about 30,000 in 2020.
VinFast has said it is working with investment banks to prepare for an IPO that would make it one of the first Vietnamese companies to be traded in the U.S.
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