Vietnamese e-vehicle maker Vinfast looks to $50 billion IPO

Photo: Y.Leclercq, CC BY-SA 4.0, via Wikimedia Commons

The quickly-growing Vietnamese auto manufacturer Vinfast says it is considering going public via an IPO in the US or a high-profile merger. With a focus on e-vehicles and plans to export to Europe and the US next year, the firm joins Grab and other innovative companies in Southeast Asia that have shown signs of major growth during the pandemic.


Vietnamese conglomerate Vingroup has announced that it is considering options to take its car manufacturing business public via a possible IPO in the US or a special-purpose acquisition company (SPAC).

The company is the first car manufacturer in Vietnam to target global markets. It would be the first Vietnamese firm to be listed in the US and one of the first from Southeast Asia to hold a major IPO in the US, following the listing of Singapore-based gaming and e-commerce company Sea in 2017.

Vingroup is Vietnam’s largest corporation and was founded by the country’s wealthiest man, Pham Nhat Vuong. Vinfast announced a new line of electric vehicles in January which it says will be exported to European markets beginning in 2022, and has plans for significant expansion into the US.

According to anonymous sources who spoke with Bloomberg, a public offering could bring in US$2-3 billion and the company is hoping for a valuation of $50 billion or more. As a whole, Vingroup’s current market value sits at around $20 billion after share prices rose over 25% in the past year. Sources told Reuters that the company is working with Credit Suisse Hong Kong on the possible US IPO.

The auto firm is also considering the option of a SPAC, also known as a “blank check” company. SPACs are shell companies set up solely to raise money through an IPO and then purchase an existing private company, though SPAC managers won’t release any information about potential acquisitions until after a deal has been secured.

Just days before Vinfast’s announcement, massive delivery startup Grab announced that it will go public in the US through a merger with a SPAC. Grab will reportedly raise over US$4 billion from some of the world’s biggest investors, including Fidelity and BlackRock. The deal is the largest SPAC merger to date.

The potential listing of Vinfast and the merger by Grab are the latest in a series of moves during the pandemic that suggest Southeast Asia’s startups and quick-growing companies will play an increasingly large role in the region’s economy. While foreign investment and existing global supply chains will continue, the success of tech firms and disruptive companies has become a unique trait of Southeast Asia’s developing economies. 

Photo: Alexander Migl, CC BY-SA 4.0, via Wikimedia Commons

Vinfast makes quick push for global markets

Founded in June 2017, Vinfast has begun making inroads within Vietnam’s domestic market but is in large part focused on establishing itself as a global electric smart car brand. 

VinFast CEO Thai Thanh Hai has said the company was aiming to become profitable within five years but she suggested this timeline may be drawn out due to the pandemic. Vinfast sold around 30,000 vehicles in 2020, or less than 10% of all cars purchased in Vietnam. Media coverage has said sales of the company’s domestic electric vehicles have struggled due to a lack of charging infrastructure in the country. 

While vehicle sales may have been slow, the firm saw significant media attention in mid-2020 when it began using its facilities to produce ventilators as countries around the world faced shortages amid the pandemic.

After rolling out a line of luxury SUVs and other e-vehicles earlier this year, the Vingroup subsidiary has made a series of announcements detailing its plans for expansion. The company is moving ahead with operations in the US, having announced in March that it hopes to open a US factory, with founder Pham committing up to US$2 billion of his own money. The firm has already secured permission from California regulators to test self-driving smart cars in the state and plans to set up 35 California showrooms and service centers this year.

The VinFast R&D Institute has also opened an office in San Francisco, as well as Australia, and is developing autopilot features for vehicles that could hit the US market in 2022, according to Bui Hai Hung, head of VinAI Research.

Though the models slated for Europe and the US next year are aimed at the luxury market, Vinfast has touted the fact that it plans to produce e-vehicles that are cheaper than comparable combustion engine cars. One step in this direction is the company’s unique plan to lease batteries to car owners, reducing initial costs to consumers and shifting the responsibility for any repairs or battery-related expenses to the company.

Vinfast’s global ambitions will require a large amount of capital and, as the company moves forward with plans for exports and expansions, an IPO or a SPAC merger would provide much needed support. While many of Southeast Asia’s newly-founded companies don’t make it to this point, the success of Vinfast, Grab, Sea and others suggests that the pattern of rapid growth will become a mainstay of the region’s economies.

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