Vietnam’s largest conglomerate Vingroup is putting a halt to its smartphone production after announcing plans to enter the electric vehicle market in the US. The news comes only weeks after VinSmart, its smartphone and TV unit, debuted the sales of three 4G phone models in the US in late February, according to a local media report.
In December, VinSmart first announced plans to sell 5G smartphones in the US this year, after signing a contract to manufacture 2 million devices for an undisclosed US firm in November. Vingroup now said that VinSmart will be closing down its TV and smartphones research and production to mobilize all resources on developing electronics and infotainment for VinFast automobiles, according to a statement on Sunday. The unit will produce electronic components, battery cells, and electric motors, as well as develop in-car features for the new EVs.
In Vietnam, VinSmart currently operates two smartphone factories, where it can produce 130 million units per year, according to a Reuters report. The smartphone brand is currently available in Russia, Myanmar, and Spain. “As part of the all-out efforts in the new direction, VinSmart’s factories will keep manufacturing currently available TVs and mobile phones until the end of their product lifecycles to meet market demands,” according to the statement.
Carmakers from across the world are eager to enter the American market, where EV sales are poised to grow to 2.5% of all retail vehicle sales this year, according to data from research firm Edmunds. VinFast, which unveiled three new self-driving electric SUVs in January, will start taking orders for its VF31 in May and deliver them to customers in Vietnam from November. The other two models, VF32 and VF33, will be available for sale in the US, Canada, and Europe in November and won’t be delivered until June next year. The unit received a permit from the California Vehicle Administration to test its autonomous vehicles on public streets in California in February.
Last month, the company announced that it is mulling fundraising options, including a listing via an IPO or SPAC merger in the US, which could value VinFast at around USD 60 billion, according to reports.