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Lanon Wee

VinFast to Move Forward with Construction of U.S. Factory in Vietnam

Vietnam's VinFast will begin the building of their electric vehicle facility in North Carolina on Friday during the local hour, according to an announcement from the Vietnamese carmaker to CNBC. "We recently obtained the necessary authorization for the construction. We are very enthusiastic that [this is] a major milestone for VinFast history in in the US, which is why we will begin the groundbreaking for the manufacture here in the US," VinFast CEO Le Thi Thu Thuy stated to CNBC. The plant is expected to start running by 2025, a year behind the original target of 2024. Vietnam's VinFast will commence the building of its electric car factory in North Carolina on Friday morning local time, as confirmed by the Vietnamese vehicle manufacturer to CNBC. "We have just acquired the permit for the building process. We are filled with enthusiasm that this important project is a huge growth point for the VinFast history in the U.S., and we will launch the building works here in the U.S. today," VinFast CEO Le Thi Thu Thuy declared to CNBC. The 1,800-acre facility is expected to generate up to 150,000 autos annually in its first phase. The factory's outlook is to initiate functioning in 2025, which has been postponed from the original target of 2024. "We have a large amount of confidence in the U.S. market with the EV infrastructure... with the rules that order EVs in large cities by 2035. Consequently, we believe that there is a tremendous potential in the industry and that the whole world is switching from combustion engine cars to EVs," Le stated in the "Squawk Box Asia" show on CNBC on Friday. VinFast has been provided incentives worth of $1.2 billion from the state of North Carolina for the venture. Le acknowledged that competition in the U.S. market has been building. "Nevertheless, we still consider there to be ample opportunity in this market for new players. We believe U.S. customers are open to trying new offerings, so long as they are of good quality," he said. VinFast entering the electric vehicle market in the U.S. will necessitate that they go up against Tesla and BYD, as well as conventional carmakers that are increasingly concentrating on hybrids and EVs. An additional point in VinFast's favor is that their cars, if produced at the new facility, could qualify for up to $7,500 in U.S. tax credits. Currently, since VinFast vehicles are manufactured in Vietnam, the models are not eligible. On top of that, VinFast's VF 9 model is priced considerably less than the Tesla Model X, which can cost as much as $100,000. Motor Trend reported that the Eco model of the VF 9 could begin at about $85,000. Le went on to explain, "Our strategy from the get-go has been to provide superior quality products at reasonable prices complemented by good customer service. We are therefore sticking to that approach." The company's U.S. expansion has faced various difficulties, including a software issue that caused delayed delivery of their first customer orders in May and a decrease in their U.S. personnel in February. To rectify the problem, Le noted, "We withdrew the products as a precautionary measure because the screens could possibly switch off for a second. We then dispatched an over-the-air software update to fix the issues. Although we mentioned the recall, it was merely for a software update." In May, VinFast declared they intend to commence trading on the U.S. stock market through a partnership with the special purpose acquisition company Black Spade Acquisition Co. – CNBC's Penny Chen helped with this report.

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