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Following the successful landing of "travel giant" Didi on the New York Stock Exchange, Vietnamese electric vehicle company VinFast has submitted an IPO application to the US SEC, which may raise $2 billion through an IPO, after its valuation reached up to $60 billion, and if successfully listed, it will become the largest IPO in the history of Vietnamese companies. At the same time, VinFast will also become one of the few Vietnamese companies listed in the United States. Because a car sells for a minimum of 260,000 yuan, VinFast is often referred to as the "Tesla of Asia." But unlike the mainland's Weilai, Xiaopeng and Ideal, VinFast has focused on the US and European markets since its inception. Behind the gathering of a large number of european and American talents and capital, in the future, VinFast will be china's new energy vehicles to carry out what kind of competition, it is waiting to see!
As a startup founded in 2017, VinFast is young, but not small at all. Behind the company stands Vietnam's richest man, Pham Nhat Vuong, and his real estate-focused Vingroup. It sounds familiar to the story of "real estate companies building cars", but unlike other competitors, he succeeded. With the Winner Group, Pan Ri Wang became the richest man in Vietnam and was known as "VietnamEse Li Ka Shing". Soon after, the richest man also planned to build a car. In 2017, Pan Riwang founded VinFast in the remote rural county of Gehai, and before VinFast, there was not even a real national automobile company in Vietnam. VinFast is not only the first Vietnamese car brand to produce electric vehicles, but also the first Vietnamese car brand to enter the global market, and is often even known overseas as the "Tesla of Asia".
| Vingroup founder Pan Riwang
In order to enter the field of car manufacturing, VinFast is ambitious, and since its establishment, Pan Riwang has targeted the international market. As early as July 2018, VinFast opened a German branch in Frankfurt and a European branch in Paris; it also purchased Horton's former testing ground in Australia; a center in California to develop new technologies for its electric vehicles; and a US headquarters in Los Angeles. On the other hand, Pan Riwang invited Jim DeLuca, a former executive of General Motors, as the head of the automotive department, and finally built the company's first car with large suppliers such as Siemens in Germany; the newly appointed CEO Li Shiqiushui was a rare female executive in the electric vehicle industry, raising a very large part in the fund.
Figure | VinFast CEO Lai's Qiushui
After earning his MBA, Lai served as vice president of Lehman Brothers in Japan. In fact, Lai has spent most of his career at Vingroup, holding related positions in industry, technology, finance, investment and international relations. It was under her leadership that VinFast raised more than $1 billion from investors and also forged partnerships with General Motors, hiring top engineers and designers from traditional car brands like Toyota. It can be said that on the road of internationalization of VinFast, Li's Qiushui has contributed an indispensable role. Now, VinFast has launched a listing in the United States, according to Reuters, which is valued at $60 billion (about 382.2 billion yuan), and if successful, VinFast will become the largest IPO in Vietnam.
Founded in 2017, VinFast, which mainly produces fuel vehicles and electric vehicles, is also the first batch of independent car brands in Vietnam, and its electric vehicle products include electric scooters, electric buses, electric vehicles and charging station systems. In December 2021, VinFast delivered its first electric vehicles to domestic users in Vietnam. According to reports, by 2026, the annual production capacity of VinFast is expected to reach 950,000 vehicles.
At the end of March, VinFast just announced plans to build its first U.S. factory. VinFast said it would invest $4 billion to build a 1,976-acre facility in North Carolina. The first phase, which will have the capacity to produce 150,000 vehicles per year, is expected to be completed in July 2024. VinFast has pledged to create 7,500 jobs at its new North Carolina facility, which will produce battery-powered VF8 and VF9 SUVs. The company has said it will begin construction of the plant once it is licensed, with the goal of putting it into production by 2024. The company plans to start exporting the two electric vehicles to the United States from existing plants in Vietnam later this year. To advance its plant-building program, VinFast is seeking funding from the U.S. government, hoping to borrow from the U.S. government's Advanced Technology Vehicle Manufacturing (AVTM) lending program. The payment is managed by the U.S. Department of Energy and has nearly $18 billion in loan lines.
In fact, VinFast's car-making process, few people may know, the core of the power system of its first model LUX A2.0 is actually the BMW N20 turbo engine that was discontinued in 2017, until 2018, with the help of Germany's Siemens, VinFast got the southeast Asian electric bus parts production qualification, and truly entered the field of electric vehicle manufacturing. Relying on these internal combustion engine OEM vehicles, VinFast announced an annual production capacity of 250,000 units at the end of 2018, becoming the first national automobile brand in Vietnam's history to have mass production capabilities. In 2020, VinFast squeezed into the top five of Vietnam's auto sales charts, behind Hyundai, Toyota, Kia and Honda.
VinFast didn't start out with pure electric. According to the strategic planning of VinFast and VinGroup, 2017 to 2019 is the founding stage, 2020 and 2021 are the acceleration phase, and 2022 is the globalization phase. Among them, the acceleration stage refers to "stopping the development of fuel models and turning to the research and development of VF series electric models", VinFast previously had only 4 models on sale, all of which were fuel vehicles. In 2021, VinFast launched its first electric model, the VF e34, and on this basis extends the VF 5, VF 6, VF 7 and VF 8 and VF 9 models, covering a wide range of models from A to D class. Also in this year, in the context of the overall decline in brand sales of Japanese and Korean car companies and the overall shrinkage of the Vietnamese car market, VinFast still recorded a sales growth of 54.4%.
At a press conference in Las Vegas in early 2022, Le Thi Thuy, global CEO of VinFast, announced that VinFast would become a pure electric vehicle professional. That is to say, the complete abandonment of fuel vehicles. Lai's Qiushui also revealed that the large SUV "VF8" and "VF9" have begun to obtain orders in Vietnam, the United States and Europe. The internationalization strategy is an important feature of VinFast that distinguishes it from the new chinese car-making forces. The U.S. is one of VinFast's particularly important markets. In November 2021, VinFast opened its U.S. headquarters in Los Angeles. In March, VinFast announced the construction of an electric vehicle production plant and a battery production plant in North Carolina, and Biden posted on his U.S. president's Twitter account that VinFast has invested $4 billion in the construction of the factory, which will bring about 7,000 jobs to the United States.
Like the current domestic new forces, Vinfast has some more attractive configurations, such as AI intelligent voice assistants, intelligent value, internet of vehicles and so on. Of Vinfast's current 1,900 employees, 34 percent are AI and big data employees, 38 percent are hardware designers and development, and 22 percent are software engineers. Vinfast, which has the latest and most modern factory in Vietnam, claims to have an annual production capacity of 250,000 units, which is also the largest production capacity of the new forces in the world. It is reported that VinFast aims to deliver VF 8 and VF 9 electric crossovers to the outside world this year, the two products that benchmark Tesla's large SUV "Model X", but the price is only about half of Tesla's: VF 8 is priced at $41,000 (about 260,000 yuan), and VF 9 is priced at $56,000 (about 350,000 yuan).
Everything looks like it's going well, but the 2021 earnings report released by VinFast's Wenner Group shows that Vinfast's auto business has suffered huge losses due to sales that did not meet expectations, with a pre-tax loss of nearly $1 billion (about 6 billion yuan) in a year. It can be seen that VinFast is experiencing the encounter of new chinese car-making forces, and is in a huge loss in the early stage.
The rise of VinFast is no accident, behind which Vietnam has made a big push for electric vehicles. Back in July 2014, the Prime Minister of Vietnam approved a decision proposing a development strategy for Vietnam's automotive industry to 2025 and looking ahead to 2035. According to the decision, the Vietnamese government has set a clear target for encouraging the production of eco-friendly vehicles (energy-efficient vehicles, hybrid vehicles, biofuel-powered vehicles, electric vehicles, etc.). We also see a familiar approach: last year, Vietnam's Ministry of Industry and Trade and the Ministry of Finance jointly proposed to amend the "Special Consumption Tax Law", saying that it would provide consumers with subsidies for the purchase of electric vehicles to promote the popularization and penetration of electric vehicles. Vietnam's Vice Minister of Transport, Le Dinh Thiễn Thieu, has also called for a country of nearly 100 million people, Vietnam's electric vehicles are still underdeveloped and have broad prospects. This is also the reason why VinFast sales have soared.
In foreign media reports, VinFast is often referred to as "Asia's Tesla", one of the reasons is that although the mainland Weilai, Xiaopeng and Ideal were established early, they are currently limited to the domestic market and are difficult to find abroad. From research and development, production to sales and marketing, VinFast focuses on overseas, so overseas visibility is much ahead of Wei Xiaoli. This is also a place worthy of our vigilance. In fact, the mainland still occupies a firm voice in this new energy competition. VinFast is bustling overseas, in the final analysis, it lacks a huge domestic market, and going to sea seems to be a helpless move.
And China's world's largest electric vehicle market, China's new car-making forces are still fierce in 2022. In March 2022, Xiaopeng Automobile delivered a total of 15,400 units, an increase of 202% year-on-year; the cumulative delivery volume in the first quarter reached 34,500 units, 2.6 times that of the same period last year; as of March 31, 2022, Xiaopeng's cumulative deliveries have exceeded 170,000 units. In terms of the globalization strategy of going to sea, Xiaopeng introduced the new retail model of "direct operation + authorization", opened a direct experience store in Sweden, and officially signed a contract with the European head dealer group to bring a new intelligent travel experience to European consumers.
Ideal Cars, Ideal Cars remained strong in March, delivering a total of 11,034 Ideal ONE units, up 125.2% year-on-year. Ideal Auto delivered 31,716 new vehicles in the first quarter, an increase of 152.1% year-on-year. As of March 31, 2022, the total delivery volume of Ideal Cars reached 155,800 units. Ideal has achieved such an impressive result with only one car. Shen Yanan, co-founder and president of Ideal Auto, said that as of now, Ideal ONE has delivered more than 10,000 vehicles for 3 consecutive months. Such achievements can be achieved mainly due to the recognition of users. According to the new product plan officially released by Ideal Auto, it is expected to launch a full-size luxury range extender SUV - Ideal L9 in 2022, and two pure electric SUVs will be launched in 2023.
Nio's deliveries in March were 9,985 units, up only 37.6% year-on-year, but slightly inferior to other new forces, ranking fifth. NIO delivered 25,768 units in the first quarter, an increase of 28.5% year-on-year. As of March 31, 2022, cumulative deliveries of ES8, ES6, and EC6 reached 192,800 units. Regarding Weilai, the two major highlights of 2022 are the release of new models and price increases. In terms of new models, NIO will have three new cars delivered in 2022 - ET7, ET5, ES7. The ET7, based on NIO's technology platform 2.0, has already started deliveries on March 28, 2022; the high-hope ET5 is expected to start delivery in September 2022; it can be seen that the pace of NIO's progress in the development of new models has been accelerating. From 2022 to 2025, NIO will add 600 new substations per year in China; by the end of 2025, the total number of substations in the world will exceed 4,000. At the same time, WEIO also announced that it will open the NIO Power charging and replacing system and BaaS service to the industry. However, Weilai's current sales volume and growth rate are not as good as Xiaopeng and Ideal, and even surpassed by Nezha and Zero Run in the second camp.
Not only that, but car-making upstarts from China have set off a wave of IPOs. Just in March this year, Zero Run Auto officially submitted a listing application to the Hong Kong Stock Exchange, and once successfully listed, it will also become the fourth new car-making force to land on Hong Kong stocks. Nezha Automobile has also completed a new round of financing of more than 2 billion yuan in February, which is the third round of Nezha's series of financing series, with a post-investment valuation of more than 25 billion yuan. It is reported that Nezha has now started a Pre-IPO round with a target valuation of about 45 billion yuan, or US$7 billion, and plans to launch an IPO in Hong Kong this year. Also breaking the news of the IPO was Gaohe Automobile. According to the information, Gaohe Automobile is valued at US$4 billion (equivalent to 25.2 billion yuan), and will soon launch a series A financing, followed by a listing in Hong Kong.
Once upon a time, in the face of the menacing Tesla, Weilai, Ideal, and Xiaopeng could be described as "Three British Battles Lü Bu". Now, with the rapid rise of another wave of new forces, it is like a picture of a group of males chasing deer. Why do we develop new energy vehicles regardless of investment? Looking back at human history, from firewood to coal, from coal to oil and gas, every great progress in human society has been accompanied by an energy revolution. If we want to bid farewell to the oil age and weaken the hegemony of oil, it is necessary to develop new energy, and new energy vehicles are undoubtedly the largest application scenario. In the end, behind the new energy vehicle is a battle of the times, which may go far beyond the car itself. (Source: Tiantian IPO, Caihuashe, Xiaopeng Automobile, Ideal Automobile, NIO Automobile)
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