|Vingroup covers bases with expansion |
Pham Nhat Vuong, chairman of Vingroup, doubled down on his confidence in the future of electric vehicles (EVs) at last week’s AGM in Hanoi.
“EVs will reshape our future living and how we transport. VinFast aims to launch five newly-developed electric car models and three smart car models,” Vuong said. “EVs are still a new concept to the public, even in developed countries. It is high time for us, for Vingroup and for Vietnam, to realise the dream of going global and put our name on the global map.”
He added that VinFast has gone through an extremely rigorous research and development process. “We firmly believe in our EVs quality and functions,” Vuong said.
Vingroup is the largest privately-run conglomerate in Vietnam, with a close-knit relationship with other high-profile behemoths such as Masan and Techcombank. Its wide reach covers a number of industries which play an essential role in everyday lives, from education and medical services to hospitality and real estate.
The group is now betting big on its “new economy” EV business, clearly illustrated by great investment and recent attention on VinFast as it aims to shift local consumer behaviour from fuel-engine vehicles to electric units.
VinFast had initially targeted to sell 56,000 EVs next year but a more modest figure of 15,000 has since been announced, with Vuong putting the change down to the world’s semiconductor shortage crisis.
Still, the Vietnamese billionaire expects to deliver hundreds of thousands of EVs in the US market over the next five years. “We are fully confident in this target, as it is, in our belief, a competition between EVs and fuel-engine ones, not between VinFast and other EVs,” Vuong emphasised.
EVs outweigh traditional fuel-engine vehicles in terms of efficiency, cheaper maintenance cost (equivalent to only 35 per cent of traditional cars), and smart self-driving functions. The main disadvantage currently lies in insufficient charging infrastructure, but super-fast charging technology may eventually offset it.
With VinFast’s super-fast charging technology, it is estimated that a 20-minute charge will produce approximately 70-80 per cent of the battery, hence EVs could run an additional 400km.
VinSmart, a sister to VinFast, will mostly bear the cost from rechargeable batteries to maintenance expenses with competitive fees against conventional vehicles.
In the American market, EVs currently account for 2 per cent of total automobiles. As many as around 16-18 million of cars are sold every year, so Vingroup targets to capture 1 per cent of total market share, equivalent to 160,000-180,000 EVs annually.
VinFast EVs are manufactured in line with 5-star new car assessment programme standards and equipped with functions at the same level of standards with world-renowned EV producer Tesla. It is expected to launch level-three self-driving improvements for VinFast cars by the end of 2022.
According to the Vietnam’s National Business Registration Portal, VinFast increased its charter capital to $1.9 billion in March. In 2019, VinFast reported net losses reaching $247.9 million. In the first half of 2020, losses were reported as $286.6 million). VinFast sold about 30,000 vehicles in 2020.
The carmaker’s American dream has grabbed the headlines over the last few months, as it signalled its proposal towards to an initial public offering (IPO) on the New York Stock Exchange, which would be a first for a Vietnamese company.
VinFast was reportedly working with global advisers including Credit Suisse, JPMorgan, and Deutsche Bank for US listing, which would help VinFast to be valued at roughly $50-60 billion. VinFast’s preferred scenario is to merge with a special purpose acquisition company (SPAC).
The US Securities and Exchange Commission is stepping up scrutiny of SPACs, which exploded in popularity during the pandemic as a way for early-stage companies to go public without the regulatory scrutiny of a traditional IPO. As a result, VinFast’s US listing has been delayed due to heightening scrutiny over the country’s increasingly tough regulations.
“VinFast is still carrying out procedures needed for the US listing and could make an announcement later,” said Le Thi Thu Thuy, vice chairwoman of VinFast parent Vingroup.
Besides the company’s ambitious US takeover, chairman Vuong also shared more at the AGM about his plan with Vinbiocare – a freshly-minted biotech subsidiary with a capital of $8.7 million. “The ultimate goal of Vinbiocare is to lay the foundation for a synchronous ecosystem dedicating to biotechnology development in Vietnam, not just for COVID-19 vaccines,” Vuong said.
“However, in the short run, Vinbiocare will conduct a non-profit vaccine project to make our own vaccines, although we ourselves are not 100 per cent sure if the vaccines testimony would be a success after the third phase.”
Meanwhile, Vingroup reaffirmed its focal attention on industrial real estate, believing in this market’s vast potential. Vinhomes is currently attempting to successfully establish a synchronised ecosystem with high-class reputation for international standard luxury living, despite relatively higher expenses.
In the smart device segment, VinSmart will focus on developing Internet of Things products and tailor-made features for VinFast cars, together with a comprehensive network consisting of the three spearheads of smart cities, smart homes, and smart services.
Vingroup as a whole is striving to reach its revenue target of $7.4 billion for 2021.