Mohit Oberoi
Vietnam-based EV (electric vehicle) producer VinFast has filed for a US IPO. The company is planning the listing at a time when there has been a bloodbath in EV stocks, especially those that went public over the last two years.
Nine banks including Credit Suisse, Citigroup, JPMorgan, and Morgan Stanley, are in the syndicate looking after the deal. So far, the company hasn’t disclosed anything about the IPO including the price, date, valuation, and the amount that it is seeking from the listing.
VinFast CEO Le Thi Thu Thuy said in a statement that “Valuation or the size of our IPO will be subject, in part, to market conditions. She added, “VinFast will continue to monitor opportunities for future fundraises, as the market becomes more familiar with the VinFast brand and story.”
The company was first looking at a US IPO in 2021 at a valuation of $60 billion and was considering raising $2 billion from the issue. VinFast is part of Vietnam’s Vingroup which has interests in several industries like real estate and education.
VinFast would list under the ticker symbol “VFS” and raise funds for its plant in North Carolina. It had previously estimated that the plant would need an investment of $4 billion.
For the IPO, VinFast would convert into a Singapore public limited company under the name VinFast Auto Ltd. We have a guide on some upcoming IPOs.
VinFast Is Looking at a US IPO
Founded in 2017, VinFast delivered its first vehicle in 2019. The company initially produced ICE (internal combustion engine) cars however it has since transitioned into a pure-play EV company.
It shipped its first batch of cars to the US last month only. It expects deliveries from the North Carolina plant in 2024 and aims to sell 750,000 EVs in 2026.
The North Carolina plant would have an annual nameplate capacity of 150,000 cars. VinFast has said that currently it has 65,000 orders for cars globally. As of now, it produces cars only at its Vietnam plant and offers two SUVs.
The VF8 starts at $57,000 while the VF9 starts at $76,000. Meanwhile, VinFast has a battery subscription option as well as customers can buy the car without the battery and take the battery for a monthly subscription.
The price for VF8 drops to $42,000 while that of VF9 to $57,500 in case the buyer opts for the battery subscription. The monthly battery subscription costs for VF8 and VF9 are $169 and $219 respectively.
VinFast Offers Battery Subscription Service
Notably, NIO also has a BaaS (battery as a service) option where customers can buy its luxury cars without the battery and later take in on subscription.
NIO stock has crashed this year amid the sell-off in Chinese EV stocks. However, last month, Deutsche Bank said that the worst looks over for the company and reiterated its bullish call on the company. There is a guide on how beginners can buy NIO stock. Most analysts are bullish on NIO given its premium brand positioning.
EV Stocks Have Crashed in 2022
Meanwhile, VinFast is looking to go public at a time when markets are quite pessimistic about EV names. Even Lucid Motors, which was trading above the SPAC IPO price of $10 has fallen below that level and is now at an all-time low.
For the other EV startups, the lesser said the better and they have lost anything between 50-95% from the IPO. Arrival is possibly the worst performer and it trades below 30 cents amid the crash in startup EV companies.
Rivian stock too has plunged. It was the biggest IPO since 2014, and giants like Amazon and Ford back the company.
Coming back to Vinfast, it is not a pre-revenue company like most other EV startups that went public through SPAC mergers. However, even the performance of EV companies like Polestar, which were delivering cars before going public, fails to instill any confidence.
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This article was written for Business 2 Community by Mohit Oberoi.
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