VinFast, the automotive arm of Vietnam’s biggest conglomerate Vingroup, could seek financing from the US government to pump its planned complex costing US$4 billion in North Carolina.

North Carolina Governor Roy Cooper (left) and VinFast Global CEO Le Thi Thu Thuy ink deal for the plant construction with the attendance of Vietnamese Ambassador to US Nguyen Quoc Dung. Photo: Vingroup

The idea was shared with a group including reporters on April 9 by Vingroup Chairman Pham Nhat Vuong, the richest person in Vietnam and the Forbes-listed billionaire.

“It is also one of our financing options, but we need to prove to them that we are qualified,” Reuters cited Pham Nhat Vuong. VinFast was committed to an initial public offering (IPO) that would help establish the electric vehicle maker as a global brand, he said, adding that “We have many options in terms of financing.”

On April 7, VinFast had also said its Singapore-based holding company had filed for an IPO with US securities regulators.

Late last month, VinFast announced it will build an electric vehicle (EV) and battery manufacturing complex in North Carolina that will also create some 7,500 jobs. The plant is capable of producing 150,000 units/year in the first phase of production which is expected to start in July 2024.

The North Carolina facility will be VinFast’s first US-based vehicle factory, having the capacity to produce 150,000 vehicles a year, primarily with electric cars, buses, and EV batteries. The company will eventually produce 7-passenger and 5-passenger electric sport utility vehicles at the factory site.

VinFast, headquartered in Hanoi, Vietnam, with a state-of-the-art vehicle production facility in Vietnam’s Haiphong that has the capacity to produce 950,000 vehicles per year by 2026, is betting big on the US market.

“The project in North Carolina affirms VinFast’s commitment to investing and developing business in its international markets in general and the US in particular,” Pham Nhat Vuong said in a statement released by VinFast.

To facilitate its operations in the US, VinFast opened a US headquarters in Los Angeles last year and rolled out two electric car models at the 2021 Los Angeles Auto Show.

In 2021, the US was the world’s second-largest automotive market after China with roughly 15 million new car registrations, according to data provider Statista. In addition, the factory will put VinFast close to those consumers, Forbes quoted Adam McCarty, chief economist with Mekong Economics in Hanoi.

US Ambassador to Vietnam Marc Knapper extends congratulations on VinFast-North Carolina deal. Sreenshot: Minh Vu

Broader motivation

VinFast project in North Carolina is expected to tighten relations between Vietnam and the US in terms of economic and political ties, both domestic and international experts have said.

“It sounds [like] an incredibly logical thing to do,” McCarty said. “I think they have a global strategy and they’re taking every step seriously,” he added.   

At the 5th Vietnam-US Business Summit held on March 8, 2022, Vietnam’s Prime Minister Pham Minh Chinh requested businesses of the two countries to continue their investment to contribute to strengthening the bilateral relations in an effective manner. PM Chinh highlighted the role of trade and investment in the bilateral relationship, noting it’s one of the key pillars.

Meanwhile, US Ambassador to Vietnam Marc Knapper said at a meeting with PM Chinh earlier this month that the US would do anything it could to help Vietnam’s sustainable development and recovery path in the region.

Commenting on VinFast’s North Carolina project, the ambassador said this will be the largest investment by a Vietnamese company in the US and will “contribute to the prosperity of both our countries.” North Carolina and VinFast’s new partnership is “a remarkable achievement and milestone in the growing bilateral trade and investment relationship between the US and Vietnam.”

“The arrival of Vinfast to North Carolina is great news for our state and for the thousands of North Carolinians who will fill the new jobs created as a result,” said North Carolina Speaker of the House Tim Moore.

Vingroup, established in 1993, is one of the leading private conglomerates in the region, with a total capitalization of $35 billion from three publicly traded companies (as of November 4, 2021). Vingroup currently focuses on three main areas: Technology and Industry, Services, and Social Enterprise.