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VinFast, a Vietnamese automaker founded in 2017 and has been threatening to go public in the United States in the second half of this year to raise capital, recently broke bad news. Its parent company Vietnam Vingroup Group recently announced its 2021 financial report that its VinFast business suffered huge losses due to poor new car sales, with a pre-tax loss of up to US$1 billion (about 6.36 billion yuan) for the whole year.
Vingroup pointed out in its earnings report that its VinFast automobile brand lost about $1 billion in the production and manufacturing of vehicles last year because local sales in Vietnam were not as expected, coupled with the group's increased investment in the research and development of pure electric vehicles (EVs).
VinFast's new cars with conventional internal combustion engines sold only about 35,700 vehicles last year, an increase of about 20% compared to 2020, but because of the huge amount of research and development and investment in the same period, it was unable to create profits.
In contrast, Vietnam's Vingroup Group made a profit of about 1.26 billion yuan in 2020, and in just one year it has suffered a huge loss.
VinFast has earlier announced that the brand will phase out traditional internal combustion engines and expects a full transition this year to a brand that only produces pure electric vehicles, so vietnamese Vingroup Group's investment in cars is very aggressive.
Last year, VinFast's first pure electric EV VF e34 was officially launched. Then, at the Los Angeles Auto Show in November, two more electric SUV models, the VF e35 and VF e36, were unveiled, and the company officially announced that it would have its U.S. headquarters in Los Angeles.
On December 25, VinFast delivered the first batch of VF e34 electric vehicles to domestic customers in Vietnam, and it is understood that VF e34 has received nearly 40,000 new car orders.
For the U.S. market, VinFast has high hopes, saying that it plans to start producing electric vehicles in the United States in the second half of 2024, and plans to invest in the construction of electric vehicle battery production plants in the United States.
In January, just days after VinFast CEO Michael Lohscheller left and returned to Europe, the company announced a European-oriented plan to build its first European production plant in Germany. VinFast is currently working with the German trade marketing company (GTAI) to produce electric vehicles, passenger cars and buses at the new plant in the future.
In Vietnam, VinFast's parent company, Vingroup, has begun working with the government to build a VinES battery manufacturing plant there. The plant will be supported by an investment of approximately RMB1.108 billion, and the first phase of the plant covers an area of 8 hectares and aims to produce 100,000 battery packs per year. The second phase of the plant will expand production, upgrading capacity to produce 1 million battery packs per year.
Founded in 1993, Vingroup is one of the leading private conglomerates in Vietnam, with a total capital of US$35 billion (as of November 4, 2021) in its three listed companies. Vingroup currently focuses on three main areas: technology, industry and services.
VinFast, one of Vingroup's member companies, is a brand that drives its global smart electric vehicle strategy. Founded in 2017, VinFast currently has two automotive production lines in Cat Hai and Hai Phong, Vietnam, with a maximum production capacity of 250,000 units per year, but with VinFast's current sales, the utilization rate of these two production lines is even less than 15%.