The company only offers electric SUVs.
(Photo: IMAGO/ZUMA Wire)
Vietnam’s richest man is following in Elon Musk’s footsteps, that much seems certain. All that remains to be seen is what part of Musk’s career Pham Nhat Vuong will emulate.
Will the 54-year-old billionaire from Hanoi succeed in shaking up the auto industry with a largely unknown start-up like Musk once did with Tesla? Or is he making a name for himself as the super-rich who gets himself into trouble with a risky billion-dollar bet outside of his core business – as Musk is currently experiencing on Twitter?
The question of whether Vuong is a brilliant visionary or an overly ambitious dreamer is now also being asked by investors on the New York technology exchange Nasdaq. The billionaire wants to start there shortly with his electric car manufacturer Vinfast. The company filed its IPO application with the SEC on Wednesday. Vinfast sees the listing as an important step in the implementation of its ambitious global expansion plans.
Many US investors may not yet be familiar with the name of Tesla’s new competitor: Vinfast was founded just five years ago as part of Vuong’s conglomerate Vingroup, which included real estate developers, retail chains and private hospitals in Vietnam.
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So far, the car manufacturer has only been active in the Vietnamese home market. So far, Vinfast has primarily sold vehicles with combustion engines there – with technology that largely came from German suppliers.
The richest man in Vietnam is counting on his electric cars being well received internationally.
(Photo: Bloomberg)
At the beginning of the year, however, the company decided to switch completely to electromobility – and to open up the USA as the first foreign market. The first electric cars are to be delivered in California this month – 999 copies were sent from the Vietnamese industrial city of Haiphong in the direction of Los Angeles a few days ago.
1.1 million electric vehicles per year
From the point of view of the Vietnamese car market newcomers, this should only be the beginning: By 2026, Vinfast wants to increase its production capacity to 1.1 million electric vehicles per year – from the current figure of around 300,000. Another plant in the US state of North Carolina, where production is scheduled to start in mid-2024, should also help.
Vinfast, which was managed for a few months last year by former Opel boss Michael Lohscheller, also recently considered a German factory. In addition to the USA, Canada, France and the Netherlands, the company sees Germany as one of its core markets abroad. Vinfast opened one of its first European showrooms in Cologne this week.
The company only offers electric SUVs. The promise is: “Premium quality at a competitive price”. However, the Vietnamese electric cars are not cheap: the cheapest model is available from 61,700 euros. Only those who are willing to rent the battery instead of buying it will get away with lower acquisition costs.
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(Photo: Klawe Rzeczy)
Getting involved with Vinfast is a risky business for both car buyers and shareholders: Experience with the company is still limited – even in the home market of Vietnam, Vinfast still has to prove itself as an electric car manufacturer.
The management is aware that there is still a lot of convincing to do. “We are confronted with risks arising from the fact that we are a new entrant in the electric car industry,” says the prospectus, with a view to marketing the vehicles in countries where the brand is largely unknown.
The document also tells potential investors that the company has been eating up a lot of money so far: in 2021, losses amounted to $1.3 billion and in the first nine months of this year it was $1.5 billion. And Vinfast believes it will take more heavy spending to actually have any chance of a breakthrough.
But nobody knows yet whether that will be enough to stand up to Tesla, Volkswagen and Co. Vinfast also concedes this in dry words in its prospectus: “The car market is highly competitive and it could be that we are not successful in the competition in this industry.”
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