VinFast is going public through a tie-up with special purpose acquisition company Black Spade

The electric vehicle (EV) arm of Vingroup made its debut on the US stock market by entering a business merger agreement with Black Spade Acquisition Company on May 12.

The overseas listing represents a significant milestone, highlighting the company’s determination to establish a prominent presence and solidify its position as a major player in the EV segment, though it is still a loss-making group.

Pham Nhat Vuong, chairman of Vingroup, said at its AGM on May 17, “At present, we have completed half of the listing process, with just a few remaining steps to consummate this transformative union.”

Addressing the concern of when VinFast will attain profitability, Vuong offered insights into their strategic roadmap.

“Previously, our long-term plan entailed enduring losses. However, with the backing of major shareholders, exemplified by our shift away from traditional petrol vehicles, we anticipate reaching the break-even point on earnings before interest, taxes, depreciation, and amortisation by the projected timeline of 2024-2025, provided our business operations align with our plan,” he said.

Recouping capital involves a two-pronged approach: leveraging revenue from operational activities and bolstering investment. Vuong believed that with the substantial valuation of $23 billion, reclaiming the $8 billion invested by Vingroup and its shareholders is not an insurmountable task.

However, the company admits that the journey to recoup the funds requires favourable market conditions, robust liquidity, and a diverse product portfolio that thrives in profitable ventures.

“Our mission reaches far beyond the realms of commerce,” declared Vuong, emphasising the underlying principles that guide VinFast’s journey.

Explaining the shift from petrol to EVs in the recent past, Vuong said, “Initially, it was not feasible for us to immediately delve into EVs production, as five years ago there was minimal interest in and acceptance of them. Moreover, the complexity of manufacturing EVs cannot be understated, as each vehicle involves the integration of around 40 sophisticated computing units.”

However, come August, the company will unveil a line-up encompassing all vehicle segments and catering to diverse consumer needs. “The introduction of new vehicle models will be contingent upon market dynamics, such as the declining competitiveness of sedans compared to the soaring demand for SUVs,” Vuong noted.

According to Nguyen Viet Quang, vice board chairman and CEO of Vingroup, VinFast’s rise has left its competitors scrambling to catch up. Over 24,000 cars were sold in 2022 alone, and 60,000 electric have also been snapped up, representing a 43 per cent surge compared to the previous year.

“In addition, VinBigData has emerged as the true engine driving VinFast’s revolutionary technological ecosystem to new frontiers. VinBase Virtual Assistant, known as ViVi, has seamlessly integrated herself into VinFast’s EVs, delivering an extraordinary and personalised driving experience that sets VinFast apart from the competition,” Quang said.

At Future Mobility Asia 2023 last week, VinFast announced its expansion plans into the Southeast Asian market, alongside its established presence in North America and Europe.

Le Thi Thu Thuy, vice chairwoman of Vingroup and chairwoman of VinFast, said, “Expanding into the Southeast Asian region is part of VinFast’s global development strategy. Our goal is to bring smart, safe, and exceptional mobility solutions to ASEAN countries, thereby driving a greener future for everyone.”