VinFast, the Vietnamese EV maker set to deliver its first vehicles to American buyers this month, filed a registration statement necessary for it to launch a public offering sometime in 2023.
The Asian nation’s first and only domestic automaker last week announced it began shipping battery-electric vehicles to the U.S. and hopes to deliver the first of them to customers later this month. The money raised by the planned IPO is expected to be used to help fund both product development and a new assembly complex in North Carolina.
VinFast confirmed the filing in a statement that also noted, “The number of shares to be offered and the price range for the proposed offering have not yet been determined.” It did not say how much it expects to raise through the IPO.
Making the switch to battery power
The automaker is relying on four lead banks for the initial public offering: Citigroup Global Markets, Credit Suisse, J.P. Morgan Securities and Morgan Stanley. After the completion of the IPO, VinFast will be traded on the Nasdaq under the symbol “VFS.”
Based in Haiphong, the major Vietnamese port near capital Hanoi, VinFast was founded in 2017 by VinGroup, Vietnam’s largest conglomerate. It launched production of an SUV based on the BMW X5 in 2019. But at the LA Auto Show last year the automaker announced plans to end production of internal combustion technology and switch entirely to battery-electric vehicles.
The first of those products debuted in the home market last spring. The next step comes with the launch of two larger EVs that will be exported to markets including the U.S. First out of the box is the midsize VF 8 crossover. The larger, three-row VF 9 will follow during the first quarter of 2023. During a news conference at the L.A. show, VinFast announced that two smaller models, the VF 6 and VF 7 will go on sale late next year.
Late last month, company officials confirmed that they had shipped 999 of the VF8 models to the States, Global Chief Executive Le Thi Thu Thuy saying, “There is no luckier number than 999” in Vietnamese culture.
VinFast has already begun taking orders at a handful of California dealerships and expects to expand that network by late 2023. It will subsequently start rolling out operations in other key markets for battery-electric vehicles. But the automaker may skip some states that won’t allow it to operate dealer-owned stores, Chief Service Officer Craig Westbrook told TheDetroitBureau.com during an interview at the LA Auto Show.
An unusual sales model
VinFast will offer an unusual sales model. Customers will be able to purchase a vehicle outright, or they’ll be able to purchase the vehicle at a lower price and then lease the battery. That approach will provide additional protection again possible battery failures or degradation.
For those who prefer the traditional sales model, the VF 8 will start at $57,000, the VF 9 at $76,000. With the battery lease package, the VF 8 will start at $40,700 plus monthly charges for the battery. A basic lease plan comes in at $35 a month and covers up to 310 miles of free use each month. Motorists who go above that will pay an additional 11 cents per mile. The alternative is an all-you-can-drive plan running $110 a month.
VinFast has quickly become the largest automotive brand in Vietnam and gained traction in several other Asian markets. It is betting that it can turn a sizable profit by expanding into North America and Europe. But it remains in the red, losing $1.3 billion in 2021 and another $1.4 billion during the first three quarters of this year.
U.S. plant to open in 2024
And it has significant expenses ahead. The automaker plans to invest $2 billion initially in its new North Carolina plant — but it has laid out expansion plans that could substantially increase that investment.
The new factory is expected to begin operations in 2024 and could be critical towards establishing VinFast’s presence in the States. Under the Inflation Reduction Act passed by Congress this year, automakers need to meet domestic production targets that include not only EVs but the batteries they rely on. The North Carolina facility will get its own battery production plant, VinFast said.