Nine months after breaking ground on the $4 billion VinFast plant, it is still deserted. VinFast’s electric vehicle plant project in Chatham County, North Carolina, has also been shelved.
In July 2023, a groundbreaking ceremony was held for the new 995,500 square foot plant, considered “the crown jewel of VinFast’s global expansion,” with an ambitious goal of creating 7,500 jobs in the United States and producing 150 thousand vehicles per year.
Just five feet later, VinFast submitted a revised plant plan that changed the floor space to 782,255 square feet. Not only is the area shrinking and shrinking, but the start time is also delayed, and the new factory originally planned to open in 2024 has been postponed to 2025, which may be far away from the current progress.
What’s worse than a stagnant factory,VinFast is bleeding.
In August 2023, the new car maker’s share price once reached $80, surpassing China’s ideal and Xiaopeng, and the limelight was not lost for a while, but now it has fallen to $2-3 per share.
For the new car manufacturer, money is the lifeblood. In 2024, VinFast’s top three revenues were $300 million, but losses reached $422 million. Raised $173 million last quarter and had only $123 million in cash flow on hand.
Yahoo Finance has predicted that VinFast may not live to the end of this year. At the current rate of cash burn, VinFast is likely to run out of money in weeks rather than months if it doesn’t get well.
Vietnam’s richest man sells house to save car
Despite the ups and downs, VinFast is good news.
The company said it grew 444 percent in the first quarter of 2024 from a year earlier. The numbers look staggering, with actual sales of only 9,689 units, down 28% month-on-month. The so-called “global market” is currently only Vietnam, the United States and Canada.
Of those, 8,200 units were sold at the Vietnam base, the majority (95%) of which were bought by sister company GSM, a rental car operator. VinFast sold 927 new vehicles in the United States in the first quarter of 2024, accounting for 0.3 percent of electric vehicles, sources said.
VinFast, which has poor sales, cannot make ends meet, and spends like water, even implicated parent company Vingroup.
According to Reuters, VinFast lost $5.7 billion over the past three years. VinFast received $11.4 billion in capital from Vingroup, its affiliates and the group’s billionaire founder, Pham Nhat Vuong, between its inception in 2017 and Dec. 31, 2023, according to a filing by the U.S. Securities and Exchange Commission in late March.
The reality is grim, and VinFast is still full of information about the future, with plans to sell about 100,000 vehicles this year and break even on gross margins by 2025.
At present, the brand has 119 car showrooms around the world, and the retail business in the North American market is expanding, with the first VF9 models expected to be delivered at the end of the second quarter and the beginning of the third quarter.
In order to build cars, Vietnam’s richest man is suffocating for dreams, and even a scene of “selling houses and saving cars” before the crash of Evergrande Motors.
In March, Vingroup announced a $1.6 billion sale of shares and assets in its retail arm, Vincom retail, which has parts of its real-estate business and is still profitable. Vingroup said some of the proceeds will go to VinFast because the automotive business has more growth potential.
The US magazine “Foreign Liaison” does not think so, the magazine published a commentary article saying that few car companies from emerging markets such as Vietnam have made similar attempts to VinFast because it is too difficult.
The global automotive industry is highly competitive, with Japanese, US, Korean, European and, increasingly, Chinese brands vying for market share. Building a car involves a lot of upfront costs, a lengthy supply chain and a huge investment in research and development, and it is not a simple thing.
The two biggest car producers in Southeast Asia are Thailand and Indonesia, but neither has a competitive local car brand. VinFast may feel it has a chance to gain a foothold in the electric car industry before big brands such as Toyota transition. But so far, many are skeptical.
VinFast’s products do not have time-tested designs, nor are they an established brand. They don’t even have an opening in Vietnam yet, and they want to break into the international market. Vietnam lacks the soil for a car industry, not a hub for car manufacturing and export, and VinFast’s decision to start at the finish line is puzzling.
It’s a bold plan and a costly gamble, and for now, Vinfast doesn’t stand a chance of winning
For $2,599, the new car maker is selling two-wheelers.
It’s not light in the east, it’s bright in the west.
Arrested Development of Electric Vehicles, VinFast began to expand the two-wheeler territory, which is what the Vietnamese are good at.
In April, the Vietnamese automaker officially launched the VF DrgnFly electric self-drive to the U.S. market for $2,599 with a two-year unlimited mileage warranty. The move will further strengthen its position in global sustainable mobility.
The VF DrgnFly combines the popularity of motorized cars in the United States with Vietnamese aesthetics, and the design is inspired by the flying dragon in Vietnamese culture. In terms of product design, VF DrgnFly has wide handles, wide tires, “seats designed in line with human engineering,” and groundbreaking “flat frame.” Ensuring comfort and control on a variety of terrains, a balance is achieved between weight and durability.
In the construction of two-wheeled vehicles, Oriental World has rich experience and a broad market. The VF DrgnFly is equipped with a 750 W rear hub motor, with a top speed of 45 km / h on a single charge and a range of 110 km.
In terms of intelligence, the small electric donkey is also equipped with 4G connectivity and supporting APP, with modern functions such as remote locking, location positioning, riding record, remote diagnosis, and OTA.
So a package down, VFDrgnFly’s prospects are not optimistic. Some media said that for the US electric bicycle market with considerable excess inventory, $2,599 is a very high price that most people find difficult to accept.
VinFast is not giving up and hopes to expand into Thailand, Indonesia, India and the Middle East this year. Construction has begun on a $500 million plant in India. However, it has not yet been confirmed whether VinFast will produce only electric cars at the plant or will also produce two-wheeled electric cars.
Two-wheelers are one of the fastest growing segments in India, following the government’s intention to electrify all two-wheelers by 2026. At the same time, data from the Ministry of Industry and Trade show that sales of electric motorcycles have surged by about 30-35% in recent years, making Vietnam the most important market for electric two-wheelers in the ASEAN region and the second largest in the world after China.
With the experience of the four-wheeler market to feed two-wheeler, VinFast’s “drop wheel attack” is also a way out.
