More troubling news for VinFast, the Vietnamese electric vehicle maker that wants to build a $4 billion EV production plant in Chatham County. The company recently reported that it lost $598 million, or 49%, in the first quarter of this year.
According to Reuters, the company attributed the quarterly revenue decline of almost $84 million to lower selling prices and its phase-out of internal combustion vehicles as it pivoted to become a dedicated EV maker.
The company has been hemorrhaging money for some time now, losing $2.1 billion in 2022 and $1.3 billion the year prior.
Looking to get some financial assistance, VinFast announced that it would merge with the special-purpose-acquisition company (SPAC) Black Spade Acquisition Company, allowing it to go public through a stock offering in the U.S.
The transaction is expected to be completed by July 20, according to the latest filing, and will value VinFast at approximately $27 billion with an equity value of $23 billion. After the transaction, existing shareholders of VinFast will hold approximately 99% shares of the combined company.
Parent company Vingroup, Vietnam’s biggest conglomerate, and founder Pham Nhat Vuong pledged the startup company $2.5 billion in funding in April.
Trying to shore up confidence in its brand, the company said last week that it would give eligible customers a service voucher or cash if their EVs break down. The policy is separate from the warranty program and is valid in the United States, Canada, and Vietnam.
The National Highway Traffic Safety Administration (NHTSA) issued the recall due to a multifunction head-unit display problem caused by a software error that may cause it to go blank while driving, increasing the chances of a crash. The error was talked about in-depth in many critical reviews in the past few months.
Reviews of the vehicle sparked words like abysmal, “very, very bad,” “yikes,” “simply unacceptable,” and “return to sender,” including from the highly respected MotorTrend, which said VinFast had the right idea, but the VF8 is nowhere near ready for customer deliveries that are already taking place.
These issues raise concerns about the plant scheduled to be built at the Triangle Innovation Point in Moncure and slated to open in 2025.
To attract the newly formed company, the state and Chatham County committed to spending nearly $1.2 billion in incentives over the next 32 years.
Using the state’s Transformative Job Development and Investment Grant program (JDIG), VinFast could get up to $316.1 million in reimbursement from the state over three decades if the company meets hiring goals.
The total state appropriation is estimated at $766 million, with Chatham County giving VinFast another $400 million incentive package.
New roads are being built for the project through eminent domain, leading to the loss of many homes, businesses, and a church that has been around since 1888.