Vietnam’s richest person bets over $10 billion to break into the global EV market

[Viet]

Le Thi Thu Thuy, CEO of VinFast (Bloomberg)

Vietnam’s richest person, billionaire Pham Nhat Vuong, didn’t become worth over $4 billion without taking some risks. His current venture is to create Vietnam’s first global automaker, VinFast Auto, and he’s betting over $10 billion to make the company into a viable brand in the global electric vehicle market. But its journey so far has been bumpy, and there’s skepticism about whether it can compete outside its home country. Still, VinFast’s CEO, a former banker, is full of confidence. “Our mission is to make EVs accessible to everyone,” says Le Thi Thu Thuy, 49.

VinFast has aggressive targets, including selling 1 million EVs worldwide within six years. (It took Tesla 17 years.) After investing almost $10 billion to roll out several EV models, develop a charging infrastructure and build a fully automated factory in Vietnam, the company plans to invest a further $1.8 billion in the next three years to get factories running in the U.S. by 2025, and Indonesia and India in 2026. Of that total, $1.4 billion is going into the first phase of a North Carolina plant under construction. The goal is to take advantage of government subsidies and tax benefits in these locations and increase the group’s annual production capacity to about 550,000 units by 2026 from 300,000, the current capacity of its sole factory in Vietnam.

VinFast currently is a tiny player in the massive U.S. market. According to automotive industry site Mark Lines, in 2023’s first nine months, the company sold merely 2,000 EVs in America. In total, the Vietnamese manufacturer says it delivered about 21,000 EVs in the first three quarters, but roughly 13,000, or more than 60%, stayed home for use by Green and Smart Mobility (GSM), an electric taxi company owned by Pham and his flagship company Vingroup. It says GSM ordered 30,000 EVs for the rollout of an electric taxi service across Vietnam, which is being expanded to Laos, then to Cambodia. GSM says it is mulling an entry into the U.S. taxi market.

Sales to the group affiliate are indicative of sluggish demand, Fathima Shifara Samsudeen, Colombo-based analyst at LightStream Research, said in a note published in September on research platform SmartKarma. Separately, in an email, she says the company “will struggle to sell its EV models in the global markets.” In the U.S., sales of the midsize SUV dubbed VF 8, the first and only model available, were hurt by an embarrassing recall in May—two months after sales began.

VinFast says it voluntarily recalled vehicles to fix a software glitch after the U.S. National Highway Traffic Safety Administration warned the flaw blocked safety information and “may increase the risk of a crash.” Thuy says the company used the market feedback to help it fix the vehicles. “We have released software updates that provide important enhancements,” says Thuy by email.

Aside from the recall, the VF 8 around the time of its launch received many negative reviews, including from mainstream auto media outlets such as Motor Trend, Road & Track, Edmunds and Kelley Blue Book.

The car was said at the time to have poor ride quality and issues with its airconditioning, blind-spot monitor, GPS, turn signals and brakes. Addressing such criticisms, Thuy says: “The car may not have been designed to be tested under special conditions and behavior, which did not satisfy some drivers, but we quickly added the requested enhancements.” In a press release from late October, the company said: “In the past few months, this pioneering company has introduced a host of improvements to its VF 8 electric SUV designed to enhance the driving experience for customers.”

VinFast’s VF 9.
COURTESY OF VINFAST

Thuy remains undaunted, affirming that VinFast can achieve its target of delivering as many as 50,000 EVs this year with sales expected to accelerate in the fourth quarter, which she considers the peak period. “We have several models ready to be launched globally in a couple of months,” she says. And VinFast plans to start selling the VF 8 in France, Germany and the Netherlands by the end of this year. It will also start shipping its seven-seater SUVs, dubbed VF 9, as well as a compact SUV, VF 6, to North America.

David Byrne, a Hong Kong-based analyst at research firm Third Bridge, says it will take time for VinFast to gain traction in North America and Europe due to the reputational issues following the U.S. launch of VF 8 this year. “They need to get things right off the block if they’re going to be selling a decent number of vehicles,” Byrne says. “It takes a long time to gain traction even if they do everything well.”

VinFast’s VF 8 electric vehicle exterior.
COURTESY OF VINFAST


VinFast cars do get praise for their looks, thanks to Italian designer Pininfarina, which helped create iconic sports cars such as the Ferrari 458 Spider. But VinFast’s EVs are not competitively priced, Byrne says. The starting price for the VF 8 is $46,000, which is similar in price to a Tesla model Y, a Ford Mustang Mach E or a Hyundai Ioniq 6. With a range of 425 kilometers on a full charge, the VF 8 falls below the claimed range of the three comparable models, all boasting full ranges of at least 482 kilometers or more. “Our vehicle pricing is not higher than competitors,” Thuy says. “The prices already include cutting-edge technology features.” For instance, VinFast cars are equipped with an advanced driver assistance system, which guides drivers when changing lanes and helps autonomously park the car.

VinFast’s VF 8 electric vehicle comes with advanced driver assistance features that include autonomous parking.
COURTESY OF VINFAST


In Byrne’s view, VinFast could have gained more traction in the U.S. if the company tapped more local industry knowledge. “They have hired foreign experts but they don’t necessarily listen to these experts,” he says. Thuy says VinFast is not dependent on any single individual. “VinFast is a startup company,” she says. “This requires deployment capability and speed that not everyone can adapt to. We regularly refine our organizational structure to ensure operational efficiency.”

Vietnam’s Richest Person Bets Over $10 Billion To Break Into The Global EV Market

Vietnamese billionaire Pham Nhat Vuong wants to make VinFast Auto into a viable global electric vehicle brand. But its journey so far has been bumpy.

www.forbes.com

 

[REhorror]

I have a bad feeling behind this.

 

[RescueRanger]

I have a bad feeling behind this.

So you should, the market is saturated. EV sales globally are down.

 

[S10]

This guy holds 97% of outstanding shares in VinFast through his subsidiaries despite VinFast being supposedly a "public" company. It's got all the traits of a pump and dump scheme.

So far 90% of all cars sold by VinFast are bought by his own cab company in Vietnam.

 

[MH.Yang]

This guy holds 97% of outstanding shares in VinFast through his subsidiaries despite VinFast being supposedly a "public" company. It's got all the traits of a pump and dump scheme.

So far 90% of all cars sold by VinFast are bought by his own cab company in Vietnam.

VinFast sold 20,000 volumes this year, 90 per cent of which were bought by his own taxi company.

The owner of this company controls 97% of the stock, with only billions of dollars coaxing the few remaining shares. The stock was once hyped to $93, now the shares are only $6.

All parts for VinFast cars come from China, with no exceptions. And the Chinese manufacturers that help VinFast make parts are small, substandard, lowest-end factories that have been rejected by companies like BYD.

Let's see how this story ends.

 

[etylo]

The stock was once hyped to $93, now the shares are only $6.

Ha ha, what a joke then.

 

[KAL-EL]

I wish you only the best Mighty Vietnam!