Another electric-vehicle startup plans to challenge
and other auto makers for a piece of the growing EV pie. It needs some money to do so.
Vietnamese EV maker VinFast filed a registration statement with the Securities and Exchange Commission on Tuesday. It’s a step along the path toward raising capital in an initial public offering. VinFast filed confidential paperwork back in April. There was nothing for investors to read and review back then. Now that the filing is public, investors have a chance to learn something about the car maker.
Here are seven noteworthy items from the new filing, along with some context.
The Brand Stands for Something
In Vietnamese, the abbreviation for VinFast translates to style, safety and creativity. Three things that car buyers will appreciate.
VinFast Is Targeting the U.S.
U.S. investors that buy listed shares of
(LI) can’t buy cars from those three. Neither has entered the U.S. market yet, a step that would require engineering changes and more testing.
VinFast wants to be in the U.S. It plans to build a car plant in North Carolina that will be operational in 2024. Plant capacity is targeted at 150,000 units.
Local production is a requirement for any auto maker looking to be eligible for federal purchase incentives that can amount to up to $7,500 per vehicle.
VinFast Has the Manufacturing
VInFast currently makes cars at its factory in Hai Phon. That plant can make 300,000 vehicles a year, according to the company.
It Has the Cars
The company has sold about 16,800 gasoline-powered vehicles this year through September. That business is shrinking, down from 25,500 vehicles in the same period of 2021. The plan is to phase out gasoline car production.
VinFast has sold about 2,100 EVs in 2022 through September, along with almost 44,000 e-scooters.
On the EV side of its business, VinFast offers the VF5, VF6, VF7, VF8 and VF9 vehicles. They are all crossover or SUV-sized vehicles which get larger as the numbers increase.
The VF8 and VF9 SUVs are two of the models VinFast plans to sell in the U.S. As of the end of September, VinFast said it has reservations of 58,000 for VF8 and VF9 SUVs combined.
The vehicles start at about $57,000 and $76,000, respectively. A long-range
(TSLA) Model Y starts at about $66,000.
Investors Should Think NIO
Car buyers can pay as little as $42,200 and $57,500 for the VF8 and VF9, respectively, if they choose to lease the battery. That’s something NIO, the Chinese EV maker, plans to offer its customers. Leasing the battery reduces the upfront cost of the car, putting the purchase price in-line with equivalent gasoline models. The monthly battery payments then approximate what people pay to fill up their tanks with gasoline. It’s an innovative approach to lowering one barrier to EV adoption–high upfront costs.
December Is Not April
Timing is everything. In April, Tesla (TSLA),
(LCID) shares were much higher, at about $350, $40 and $25, respectively.
Tesla stock closed below $180 a share on Tuesday. Rivian and
shares are at about $28 and $9, respectively. The declines have wiped out almost $600 billion in market value, or more than twice the market value of
Tesla stock has fallen almost 50% this year. The
Dow Jones Industrial Average
have declined about 18% and 8%, respectively.
Earlier in the year, VinFast was hoping for a $60 billion valuation. It won’t be close to that in December.
Regardless of the condition of the market, the IPO could be a couple of months away, given the registration statement has been filed. Citi, Morgan Stanley, Credit Suisse and J.P. Morgan are lead underwriters for the deal.
Write to Al Root at firstname.lastname@example.org