Vietnam is an odd destination for the next Elon Musk. That is why Le Thi Thu Thuy is someone to keep an eye on in 2023. The 48-year-old is driving VinFast, a loss-making electric-vehicle manufacturer that is racing the American entrepreneur’s Tesla (TSLA.O) on Western highways. It’s a difficult path to take.
VinFast established its name selling gas guzzlers in the Southeast Asian country where its parent company Vingroup (VIC.HM) is the largest conglomerate. Thuy is now pushing the company in an entirely new path by going 100% electric and expanding its brand globally. She aims to open 70 showrooms in the United States, Canada, and the European Union within a year to sell automobiles like the VF9 sports utility vehicle, which costs $76,000, compared to roughly $120,000 for Tesla’s similar Model X.
Rather than relying on VinFast to develop unique technology, the former Lehman Brothers investment banker is relying on sophisticated vendors such as battery producer Contemporary Amperex Technology (300750.SZ) and electronic products firm Aptiv (APTV.N). It is also constructing a local factory in the United States, which Chinese car rivals like Nio (9866.HK) and Xpeng (9868.HK) are finding it difficult to imitate as tensions between Washington and Beijing rise. VinFast recorded 58,000 reservations in December, indicating that a costly marketing strategy is beginning to bear fruit.
A planned IPO in New York is critical to funding the expansion. Thuy must persuade investors that the company is not in financial distress. The property-heavy Vingroup is suffering as a result of Hanoi’s crackdown on the real estate sector. This suggests that VinFast has a weak parent at a time when the auto industry is also struggling: its net loss nearly doubled to 34.5 trillion dong ($1.48 billion) in the first nine months of 2022.
However, entry to Vietnam’s stock market is difficult, and according to Refinitiv statistics, only nine Vietnamese companies have listed overseas, raising less than $1.5 billion in total. VinFast’s listing would thus represent a once-in-a-lifetime opportunity to access an economy that the International Monetary Fund predicts to grow 6.2% in 2023. Thuy may at least bank on a scarcity premium to fuel her ambitious ambition.
VinFast, a Vietnamese electric-car manufacturer, is preparing an initial public offering in the United States, according to an initial prospectus issued on December 6.
VinFast reported a net loss of 34.5 trillion dong($1.48 billion) for the nine months to the end of September, against 18 trillion dong for the same period a year earlier. Revenue fell to 10.5 trillion dong, down from 11.2 trillion dong.
Reuters
