Even though VinFast, a Vietnamese manufacturer of electric vehicles, is reducing its workforce in North America, the company has stated that it is still on track to begin production in the United States by 2024.

The nation’s first domestic automaker previously declared intentions to list in the United States.

VinFast, the automotive division of Vietnam’s largest conglomerate Vingroup, recently announced it would be eliminating jobs in the United States as part of a restructuring initiative that would consolidate its operations across the United States and Canada.

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

The news of the job cuts follows a Reuters report on Feb. 3 stating that VinFast would be delaying deliveries to its initial clients in the United States.

In November, VinFast sent its first shipment of automobiles to the United States, which included 999 VF 8s. It originally intended to ship them by the end of December, but has since postponed deliveries until February.

Le reported on Friday that there are roughly 12,000 pre-orders in the United States.

The automaker has announced it will establish a production facility in North Carolina to manufacture EVs as it steps up its U.S. expansion to compete with American automakers like Tesla.

Le claimed that the job cuts won’t delay the start of production at the company’s first North American manufacturing facility.

“We are in the final stages of getting a permit to test the 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 the trial production in 2024 as originally planned,” Le said. The annual production capacity of the plant is 150,000 electric vehicles, according to the company’s release.

According to the CEO, Europe’s Germany, France, and the Netherlands will be the next target markets for VinFast.

However, because they are made in Vietnam rather than the United States, VinFast vehicles are currently ineligible for the $7,500 tax credit in that nation. The 2023 VinFast VF 8 model’s starting price is $40,700.

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

“We didn’t see it coming but we always [planned] to have a plant in the U.S. so the IRA increased our manufacturing capability in the U.S. to make sure that our customers will be able to have access to electric vehicles at a reasonable pricing.”

“I believe that in the long run [we are] going to concentrate the manufacturing of electric vehicles as well as the key components of electric vehicles in the U.S.,” Le added.

On December 6, VinFast submitted an application for a U.S. initial public offering. According to its prospectus, they have not disclosed either the quantity or value of the shares that will be traded. Additionally, it is unclear exactly when they intend to list.

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

She responded, “When we are ready to talk more about it, we will be happy to share more,” when asked when the IPO is anticipated to take place.

(Adapted from CNBC.com)

Categories: Economy & Finance, Geopolitics, HR & Organization, Regulations & Legal, Strategy, Sustainability