Vietnam is an unlikely home of the next Elon Musk. That’s why Le Thi Thu Thuy is a person to watch in 2023. The 48-year-old is at the wheel of VinFast, a money-losing electric vehicle maker that races the American entrepreneur’s Tesla (TSLA.O) on western roads. It’s a complicated process.
VinFast has made a name for itself selling gas guzzlers in the Southeast Asian nation, where parent company Vingroup (VIC.HM) is the largest conglomerate. Now, Thuy is going in a whole new direction by making the automaker fully electric and by taking its brand global. Within a year, she plans 70 showrooms in the United States, Canada and the European Union to sell cars like the VF9 SUV, which costs $76,000, about 15% more than Tesla’s comparable Model Y.
The former Lehman Brothers investment banker leans on cutting-edge vendors like battery maker Contemporary Amperex Technology (300750.SZ) and electronic products outfit Aptiv (APTV.N) rather than relying on VinFast to develop proprietary technology. It is also building a local factory in the United States, something Chinese auto rivals such as Nio (9866.HK) and Xpeng (9868.HK) are struggling to replicate as tensions between Washington and Beijing mount. An expensive marketing campaign is starting to pay off: VinFast reported 58,000 reservations in December.
A planned IPO in New York is key to funding the expansion. Thuy must convince investors that the company is not desperate for money. Hanoi’s crackdown on the real estate industry is a drag for the real estate-intensive Vingroup. As a result, it appears that VinFast has a weak parent company at a time when the auto industry is also deeply in the red: its net loss nearly doubled to 34.5 trillion dong ($1.48 billion) in the first nine months of 2022.
Yet access to the Vietnamese stock market is tricky and to date, only nine Vietnamese companies have been listed abroad, raising less than $1.5 billion in total, according to data from Refinitiv. VinFast’s listing would therefore present a rare opportunity to tap into an economy that the International Monetary Fund expects to grow at 6.2% in 2023. In any case, Thuy can count on a scarcity premium to fuel her great drive.
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CONTEXT NEWS
Vietnamese electric car maker VinFast is planning an IPO in the US, according to an initial prospectus published Dec. 6.
VinFast reported a net loss of 34.5 trillion dong ($1.48 billion) for the nine months to the end of September, up from 18 trillion dong for the same period a year earlier. Sales fell from 11.2 trillion dong to 10.5 trillion dong.
This story was first seen on Reuters
