VinFast opens second domestic factory to hit 1 million EV target

Vietnamese electric vehicle manufacturer VinFast has started production at its second domestic factory in Ha Tinh province as of June 30, 2025.

The facility covers 36 hectares and has an initial annual capacity of 200,000 units, according to a company statement.

This new factory complements VinFast’s existing plant in Haiphong, which is projected to achieve a production capacity of 950,000 units by next year.

The company has set an overall annual production target of 1 million vehicles for both domestic and international markets.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Ambitious manufacturing capacity far exceeds current sales volumes

VinFast’s massive production expansion reflects an optimistic growth strategy that contrasts with its current sales reality.

The company’s combined factory capacity will reach approximately 1.15 million vehicles annually when both plants are fully operational, yet they delivered only about 56,000 units in the first five months of 2024.

This suggests VinFast is building capacity that’s roughly 8 times larger than its current annualized delivery rate of approximately 134,400 vehicles.

Their 2025 delivery target of 200,000 vehicles exactly matches the capacity of the new Ha Tinh factory, indicating a carefully staged expansion approach despite ongoing financial losses ($712.4 million in Q1 alone).

This capacity-first strategy mirrors earlier approaches by Tesla, which similarly built massive factories ahead of demand curve in its growth phase.

2️⃣ Leveraging Vietnam’s transition from motorcycles to electric mobility

VinFast’s domestic market strategy appears strategically aligned with Vietnam’s evolving transportation landscape.

Vietnam has been one of the world’s largest motorcycle markets, with approximately 43 million registered motorcycles by the end of 2014 and about 3 million new motorcycles added annually.

The Vietnamese government has been actively working to reduce motorcycle numbers due to traffic congestion and environmental concerns, creating policy conditions favorable for electric vehicle adoption.