The big shortage of electric vehicles (EVs) is a golden opportunity for VinFast to conquer the global market and build its brand, said Pham Nhat Vuong, Chairman of Vingroup, the automaker's parent company.
"The world is very short of electric cars. Therefore, good products will sell very well," Vuong told Vingroup’s annual general meeting in Hanoi on Wednesday.
He said 4,000 units have been ordered by the U.S. market to date, which suits to the company's plan to make 17,000 this year.
In response to a shareholder's inquiry about production inputs, Vuong said the supply chain disruptions due to China's Covid-19 situation have caused negative effects as some components are sourced from this market.
VinFast is accelerating its strategy of localizing components by inviting foreign suppliers to set up shop in Vietnam, with incentives like exemption of land and workshop rent for 10-15 years.
"We want to make the auto supporting industry develop strongly. The localization rate of VinFast vehicles is now 60% and will be 80%," Vuong told the meeting.
He noted that about 600,000 EVs to be sold in the U.S. will be made in Vietnam as the capacity of its factory there is only 150,000 units per year, while the plan is to sell 750,000 to this market in 2026.
The chairman said an initial public offering (IPO) for VinFast might be delayed until next year due to market uncertainty. "We are seeking for an IPO in the fourth quarter, but given numerous market uncertainties, we may delay it to next year, if necessary," Vuong said.
"The IPO is not just for fundraising. It's also about marketing and building VinFast's position in the global market," he added.
Starting operations in 2019, VinFast is betting big on the U.S. market, where it has already started sales with two all-electric sport utility vehicles (SUVs) and a battery leasing model that will reduce the purchase price.
VinFast and the government of North Carolina in late March signed a memorandum of understanding for the establishment of VinFast’s $4 billion manufacturing plant. The young automaker had earlier said it plans to begin construction of the plant as soon as permits are granted with a goal of starting production by 2024.
VinFast, a Singapore-incorporated subsidiary of Vietnam's Vingroup, filed for an IPO in the U.S. on April 7.
On Tuesday (Canada and Europe time), VinFast announced its pricing details and battery subscriptions for the VF 8 and VF 9 in Canada, as well as for the European markets, including Germany, France, and the Netherlands.
Vingroup reported its net revenue at VND125,688 billion (over $5.45 billion) in 2021, and recorded a consolidated after-tax loss of VND7,558 billion ($327.7 million), its first-ever loss in years. The loss mainly came from spending on its Covid-19 control and prevention programs and preparation for stopping the production of fossil fuel cars.
For 2022, Vingroup has set a net revenue target from business activities of about VND140,000 billion ($6.07 billion), and after-tax profit of about VND6,000 billion ($260.2 million).