Vietnamese EV maker VinFast says job cuts won’t derail plans to start U.S. production

Vietnamese electric vehicle maker VinFast told CNBC it is on track to start production in the US by 2024, even as the company cuts its North American workforce.

Vietnam’s first domestic automaker previously announced plans to go public in the US

Just this week, VinFast – the automotive arm of Vietnam’s largest conglomerate Vingroup – announced it would cut jobs in the US as part of a restructuring that will consolidate its operations in the US and Canada.

“After last year’s observation, we see a lot of similarities in the two markets, and consolidating the two markets will allow us to be stronger and more flexible,” said Le Thi Thu Thuy, VinFast’s chief executive, in an interview with CNBC’s JP Ong on Friday .

The news of the job cuts comes after a Reuters report on February 3rd that VinFast will delay deliveries to its first US customers

VinFast shipped its first batch of cars to the US in November, which included 999 VF 8s. It had plans to deliver them by the end of December, but has since delayed deliveries to February.

Le told CNBC on Friday that they have about 12,000 pre-orders in the US

The automaker is ramping up its U.S. expansion to take on American automakers like Tesla and announced it will set up a manufacturing plant in North Carolina to produce electric vehicles.

Le said the layoffs will not affect the planned schedule to begin production at the first North American manufacturing plant.

“We are in the final stages of getting permission to test construction, but the land has already been cleared. The state has already worked on the infrastructure for the land as well,” she told CNBC.

“We still plan to start trial production in 2024 as originally planned,” Le said. The plant’s annual production capacity is 150,000 electric vehicles, the company said in a statement.

The next markets VinFast plans to target will be in Europe, namely Germany, France and the Netherlands, the executive said.

However, VinFast vehicles are currently ineligible for the $7,500 US tax credit because they are not domestically produced but are manufactured in Vietnam. Prices for the 2023 VinFast VF 8 model start at $40,700.

“We immediately accelerated our plan for the North Carolina plant. Fortunately, we had already signed this agreement before the Inflation Reduction Act,” Le said.

“We didn’t expect it, but we always did [planned] to have a plant in the US, so IRA has increased our production capacity in the US to make sure our customers will be able to access electric vehicles at a reasonable price.”

“I believe that in the long run [we are] will concentrate the production of electric vehicles as well as the key components of electric vehicles in the US,” Le added.

VinFast filed for an initial public offering in the US on December 6. They did not disclose the number or price of the shares to be traded, according to the prospectus. It is not known when exactly they plan to enroll.

“We’ve been watching the intensity of the market and I think the market has been a little bit better this year. We are ready, but we need the market to cooperate more to make the IPO happen,” Le said.

Asked when the IPO is expected to happen, she said: “When we’re ready to talk more about it, we’ll be happy to share more.”