VinFast, a Vietnamese electric car company which has set up shop in North Carolina, is bleeding an astounding amount of cash. That’s not only interesting because many EV startups are in peril, but also it’s noteworthy considering the communist-owned automaker received the largest subsidy ever handed out by the state of North Carolina.
According to a report from Just the News, an earnings report from VinFast itself indicates the company has lost $623 million just during the summer months. Net losses have skyrocketed past the $5 billion mark and it doesn’t look like the hemorrhaging of funds will stop anytime soon.
Sure, the report points out VinFast saw a 3.8% bump in revenue for Q3 2023, amounting to $342.7 million, however that’s eclipsed by the $622.9 million in losses at a 20% increase. In other words, even though the Vietnamese automaker is seeing its market share increase, it’s still bleeding out.
North Carolina gave VinFast a huge subsidy to build a production facility in Chatham County. It’s estimated taxpayers will be fronting upwards of $854 million to the Vietnamese automaker, although that amount is spread out over 32 years. Still, that would make for the largest subsidy handed out by the state ever. The benefit is supposed to be jobs and economic stimulation. Neither one will come to fruition if VinFast doesn’t get its house in order.
For all of its support, North Carolina might be left holding the bag. After all, VinFast has already suffered a recall of every vehicle sold in the US. Not related to that, many in the auto industry have absolutely lambasted its current electric crossover offering here as amateurish if not downright awful.
As if it’s not shocking enough that any government inside the United States would hand over money to a state-owned Vietnamese company, it’s now revealed that taxpayer dollars are going towards an entity that’s bleeding out rapidly. In other words, the state’s subsidy could turn out to be a tremendous net loss.
What’s more, there’s no guarantee VinFast will be able to attract enough buyers in the US market. After all, this one is notoriously the most difficult to survive in the world, thanks in no small part to our robust domestic brands. Many shoppers will likely have misgivings about driving a vehicle connected to a government with a reputation that rivals North Korea and China.
Images via VinFast