Vietnam’s Vinfast, which last year filed for a US IPO, has said that its plant in North Carolina is set to commence production in 2024 but did not provide any timeline for the listing.
The company has maintained the production timeline despite recent layoffs and restructuring of the business.
VinFast is part of Vietnam’s Vingroup which has interests in several industries like real estate and education.
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 is the first domestic automaker in Vietnam.
Speaking with CNBC, Vinfast CEO Le Thi Thu Thuy said, “After last year’s observation, we see a lot of similarity in the two markets and consolidating the two markets will allow us to be stronger and more agile.”
Notably, there have been layoffs at other EV (electric vehicle) companies also. Recently, Rivian laid off 6% of its workforce even as it is ramping up production. The company laid off 6% of its workforce last year as well.
Tesla too laid off some full-time employees last year as Elon Musk cut the workforce to lower costs. The company missed the 2022 delivery guidance.
It expects to produce 1.8 million cars in 2023 and said that the production can even reach 2 million if things go right. Tesla stock has almost doubled from its recent lows. There is a guide on buying Tesla stock.
Vinfast Commits to 2024 Production Timeline in the US
Coming back to Vinfast, its CEO said, “We are in the final stages of getting a permit to test the construction but the land has already been cleared. The state has already worked on the infrastructure for the land as well.”
Vinfast is looking to make cars in the US and the plant would have an initial capacity of 150,000 vehicles. After the passage of the Inflation Reduction Act, automakers have been scrambling to produce cars domestically in the US to take advantage of the $7,500 EV tax credit.
Toyota also doubled down on its investment in the US in an apparent bid to capitalize on the lucrative credit. The tax credit has a maximum threshold of $55,000 for sedans. Since Lucid Motors’ Air sedan does not qualify for the tax credit, it is offering customers a $7,500 “credit” on its own to remain competitive.
Vinfast shipped its first batch of cars to the US last year but did not deliver them to customers in the year. These cars would not qualify for the EV tax credit as they were produced in Vietnam.
Inflation Reduction Act of 2022
That said, the company signed the agreements to build the US car before the Inflation Reduction Act. It said, “We didn’t see it coming but we always [planned] to have a plant in the U.S. so the IRA increased our manufacturing capability in the U.S. to make sure that our customers will be able to have access to electric vehicles at a reasonable pricing.”
As the EV price war escalates, companies might need to produce cars in the US to remain competitive.
Vinfast gave No Timeline for IPO Plans
Last year, Vinfast filed for a US IPO. Nine banks including Credit Suisse, Citigroup, JPMorgan, and Morgan Stanley, were in the syndicate looking after the deal. However, Vinfast did not disclose anything about the IPO including the price, date, valuation, and the amount that it is seeking from the listing.
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.
However, the valuations of EV companies have taken a beating. Despite the recent rise, even Tesla’s market cap is around half of its all-time highs.
Asked about the IPO timing, Le said, “When we are ready to talk more about it, we will be happy to share more.”
She added, “We have been watching the intensity of the market and I think this year, the market has been a little bit better. We are ready but we need the market to be more cooperative for us to make the IPO happen.” There is a list of some of the upcoming IPOs.
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