After returning from Vietnam to tour VinFast’s manufacturing facilities and learn more about the company, I found myself left with several questions about the viability of the Vietnamese electric vehicle manufacturer and what it would bring to Chatham County. I attempted to parse through those questions in two stories published in last week’s edition of the paper.
VinFast has made big promises to Chatham County with its planned $4 billion investment in a 1,977-acre site in Moncure, saying it’ll bring 7,500 jobs to the county. Likewise, the state and county are taking a gamble that VinFast will succeed, luring the EV company with $1.2 billion in tax incentives. It’s only natural to be skeptical, but the deep pockets of VinFast seemed to have persuaded local and state officials.
Writing last week’s articles got me thinking — you, reader, probably have some questions about VinFast too. So, I put out a call on social media and in the Chatham Brew newsletter asking for your questions about the company.
Here are answers to a few things you wanted to know:
The company will certainly be making an impact on the county, whether residents want it or not. Community engagement logistics are still in the works and for now, VinFast officials say they are primarily focused on breaking ground on the Triangle Innovation Point site in September.
After the dirt starts moving, we may see more specifics of relations between the company and county residents.
“VinFast has a strong relationship with Chatham County officials and the Economic Development team and we stand ready to support their efforts to maintain an open dialogue with the local community,” said Van Anh Nguyen, chief executive officer of VinFast U.S. manufacturing.
VinFast has promised to have vehicles on the market by the end of this year; those vehicles will be shipped in from Vietnam and be available in the U.S. at VinFast’s recently opened showrooms in California. The stores are currently opened in Santa Monica, San Mateo, San Diego, Berkeley, Commerce and Corte Madera. In July, VinFast said it will continue to open more than 30 stores in California by the end of 2022, while also exploring expansion to other states across the U.S.
Production from the Moncure site will, of course, have to wait until the factory is actually up and running, which, right now, is slated for 2024.
In addition to waitlists from N.C. residents, those who put down deposits come from across the U.S., and VinFast is clearly eyeing California as its central market in preliminary stages. The N.C. plant is expected to manufacture two electric SUVs in its initial phase — the VF-8 and VF-9. Nguyen said the company has received more than 65,000 reservations for these vehicles globally.
The company has established the price point for the cars around $41,000 for the VF-8. The price does not include the battery subscription service, which will cost drivers an additional monthly fee.
Officials have said the first vehicles will be off the production line in N.C. by July 2024, which is a blazing fast timeline. If you’re skeptical of that speed, however, it’s worth noting VinFast turned its factory from swampland into a well-oiled machine in just 21 months and Vingroup is known across Vietnam for its rapid construction times.
Of course, the U.S. has vastly different regulations for construction in terms of materials, environmental regulations, zoning permits and other legislative barriers not seen in Vietnam.
There is undoubtedly still memory of the war in Vietnam, but those dark recollections of the past remain in both countries. As we reported last week, the VinFast Haiphong factory itself sits atop land that was bombed out by American troops.
Despite the trauma of the war on both sides, perceptions of each country remain staggeringly cooperative, especially geopolitically. According to a Pew Research Poll from 2017, the Vietnamese approval rating of the U.S. stands at 84%. Vietnamese millennials have an even higher approval rating of the U.S. at 92%.
Meanwhile, American perceptions of Vietnam have been on the rise since the war ended; diplomatic relations between the two countries are at an all-time high. Trade has expanded massively from just over $400 million in 1994 to $77 billion last year. Even with COVID-19, trade increased to $26 billion in the first five months of the year, up almost 8% from the same period last year.
These relations have made Vietnam the second-largest Asian trading partner with the U.S., behind only China. Needless to say, Americans seem to be on board with buying Vietnamese goods, regardless of the past between the nations.
It’s important to remember that multiple things can be true. For example, the manufacturing facility in Vietnam is about 80% automated, yet it employs about 6,000 people. The same level of automation is expected at the Chatham County facility, but the plant to be built at the TIP site is planned to be more than double the size of that in Haiphong.
The gap between the two facilities will be made up by employing workers at the battery facility and research and development offices, which are anticipated to be on-site in Chatham County. In Vietnam, similar offices aren’t on-site at its Haiphong manufacturing plant.
VinFast has said the jobs in the N.C. plant will pay an annual average salary of $51,000. According to the MIT Living Wage Calculator, which shows the average wage a person needs to fulfill their basic needs, a living wage for a single adult with no children in Chatham County is $38,766. This means VinFast is providing good-paying jobs that are attractive to people looking to move to the county.
The EV marketplace has momentum and the Biden administration seems to want to make electrifying the vehicle fleet a priority. Just this week, Congress is considering additional electric vehicle subsidies in the form of a tax credit, which would provide further incentives for consumers to make the switch away from internal combustion engines.
The bipartisan infrastructure plan from earlier this year also pledged $174 billion in investment toward EVs by including funds to help automakers secure materials for electric vehicle production and convert factories to prepare for the new market sector.
But even if EV sales improve, that doesn’t guarantee VinFast’s success. The company has little name recognition across the country and the U.S. is notoriously brand-dependent when purchasing new vehicles.
Preliminary reviews of the VF-8 from auto experts say the vehicle matches up to its competitors with a sleek design and smooth drivability. The car doesn’t, however, blow the competition away, which is something auto reviewers believe the vehicles would need to do if they want to break into the competitive market.
All that said, VinFast has proven it has deep pockets and the success of Vingroup, its parent company, in Vietnam shows it can well afford to take losses in the short term. It’s why executives remain optimistic about the company’s success despite recent news of falling stock prices and delayed attempts at an initial public offering (IPO) on the U.S. exchanges.
The company has also surrounded itself with top minds of the automotive industry with experience from BMW, Renault, General Motors and more. This type of brain power insulates VinFast from critiques of the dangerous waters it’s treading toward. They know this venture into the American car space is a risk, but it’s worth taking if they can take over the U.S. EV market in the long term.
Reporter Ben Rappaport can be reached at firstname.lastname@example.org or on Twitter @b_rappaport.
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