Vietnamese electric car maker puts unexpected stake in rural North Carolina

Pittsboro, North Carolina – It’s been a long, winding road – geographically and figuratively – from the Ho Chi Minh Trail to Highway 64 in rural Chatham County in North Carolina, but that’s not stopping VinFast, a privately owned Vietnamese The company is trying to break into the global electric-vehicle market, turbo-charged by a $4 billion investment for a state-of-the-art auto factory in this southern state.

It’s a bold plan by all measures, taking on market leader Tesla and a host of better-known rivals in Europe, North America and East Asia. The global EV market was valued at $185 billion in 2021 and could grow by 24.5% to reach $980 billion by 2028.

Vinfast is betting its vast real estate holdings back home that American consumers will want to drive around in one of its sleek electric SUVs, the VF8 and VF9 models.

The move, which has been hailed by US and Vietnam officials as a sign of a growing bilateral trade relationship, hasn’t come with hiccups – WinGroup announced about 80 jobs earlier this year as its North American operations expanded. was restructured, software problems delayed delivery of the first Vietnamese-built models originally promised in December, and price cuts by Tesla and other companies forced Vinfast to cut its monthly lease prices by nearly half. Fell

Just last week, the company delivered the first 45 VF 8 City Edition all-electric SUVs to US customers across nine of its showrooms in California.

Still, VinFast CEO Le Thi Thu insisted, the future looks bright and US investment couldn’t come at a better time, as the 2022 Inflation Reduction Act provides a $7,500 tax credit for EVs manufactured in the US.

“If you look at the legislation in all the different countries and imagine how many electric vehicles are needed on the road over the coming years, over the coming decade, there is a lot of room for a lot of players in the market,” Ms. . Le told CNBC’s ‘Squawk Box Asia’ this week.

The American South appears to be a magnet for the development of new EVs factories. In neighboring South Carolina, Republican Governor Henry McMaster is seeking $1.3 billion from lawmakers for a new electric vehicle plant funded by a group backed by Volkswagen to revive the Scout brand from the 1960s, which was an early precursor to today’s SUVs. . Georgia is offering $1.8 billion in incentives to South Korea-based Hyundai for its first US electric vehicle plant near Savannah.

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Vinfast’s investment by Ted Osius, former US ambassador to Vietnam and now president of the US-ASEAN Business Council, is a major step in boosting cooperation between the two countries, which are now extensive trading partners.

“Vinfast is making a huge investment in America’s EV future – a welcome investment in a sustainable economy for Americans, Vietnamese citizens and the world,” Mr. Osius said. “I couldn’t be more excited about this visible symbol of our two countries’ growing friendship and our joint commitment to tackling climate change.”

Still, historical ironies abound with the project. Ms. Ley, who attended the Harvard Kennedy School and worked for Lehman Brothers before joining WinFast, was born in 1973 after the last US combat troops left their homeland. Vietnam, which normalized trade relations with the US in 1995, built its first in Haiphong, in the same industrial area where US military B-52s dropped more than 20,000 tons of bombs in a December 1972 strike. World class automotive factory in just 21 months.

The auto manufacturing company, established in 2017, has already delivered over 1000 new SUVs from its state-of-the-art factory in California and announced that the first batch of its US-bound VF 8 electric cars have been delivered to customers with software updates . ,

VinFast’s billionaire owner, Pham Nhat Vuong, one of the communist country’s richest men with a reputed net worth of more than $4.3 billion, also opened designer-friendly showrooms in Southern California to showcase the company’s electric sports utility vehicles Are. Fellow billionaire Elon Musk in his Tesla home market.

The company has been aggressively recruiting from major rivals such as Tesla, BMW, Porsche, Toyota, and Nissan on more than 2,150 acres of land in rural southeastern Chatham County in rural North Carolina, directly off US Highway 1, to build its auto factory. Have bought

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making process

Despite the hurdles, there’s also good news for WinFast’s US operations. The company received preliminary EPA regulatory approval to sell the cars in the US and signed an agreement with US Bank as its preferred provider of retail financing and leasing of Winfast vehicles. Vinfast has also received permits from the North Carolina Department of Environmental Quality allowing the first phase of construction to proceed.

While tensions with China – a major player in the EV market – climb, the Biden White House administration has pushed to expand ties with Vietnam, with its growing economy and strategic location on the South China Sea.

Vietnam’s rise to become a major US trading partner was partly driven by changes in regional supply chains, driven by rising production costs in China, as well as trade tensions between the PRC and the United States.

Yet some passing clouds hang over the auto maker’s auto plant project in the nearby rivers and streams of rural North Carolina. Vinfast’s proposed factory, still awaiting permits from the US Army Corps of Engineers, is designed to cause minimal damage to water quality and wetlands.

Vinfast North America CEO Nguyen Thi Van Anh told The News and Observer newspaper: “Vinfast can now proceed with the Phase 1 construction plan, which was specifically designed to avoid any impact on wetlands. “

Chatham County Manager Dan Lamontane is upbeat about the financial dividends offered by WinFast, with projections that the new plant will create more than 7,500 jobs in five years upon completion, while minimizing environmental degradation.

“In addition to employing thousands of people in our region, workers will be building environmentally responsible vehicles that will reduce our carbon footprint and it will attract other supplier and service industries,” Mr. Lamontane said in an email.

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Chatham County and the state have offered $1.25 billion in tax and other incentives to help attract the company to WinFast, including about $250 million for road and rail improvements in and around the site.

The factory’s proposed location on more than 1,300 acres of forested land and near Old Highway 1 and Corinth Road has faced some detractors, notably from the Haw River Assembly and other environmental groups. In a telephone conversation, Emily Sutton, a river protector, is candid about her concerns, warning that “the draining and filling of streams, wetlands and open water will mean a loss of aquatic life.”

Jed Keaton, a spokeswoman for the US Army Corps of Engineers office in Wilmington, said that more than 100 public comments have been filed, “most of the concerns being focused on the direct and indirect impacts on the aquatic environment, adjacent owners and wildlife habitat “

Area residents express apprehension over how officials will measure the ecological impact on thousands of linear feet of stream channels, 22 acres of wetlands and at least one acre of open water in waterways including Shaddocks Creek, Hough River, Deep River and Cape . Fear Basin.

The locals sitting at Al’s Diner in historic Pittsboro may not be discussing the deep divide that once existed between America and Vietnam. They focused primarily on how best to reconcile the economic benefits of the proposed factory with the rural character of the area and the need to preserve key fishing spots.

“It’s all about economies of scale,” said Gary Phillips, founder of Weaver Street Realty and a former county commissioner in Carrboro, North Carolina. “I believe Vinfast is the real deal but I have deep concerns for [Haw River] system that they can develop river corridors and walkways as a good corporate steward.”

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