VinFast IPO May Be Happening Sooner Than Expected as First VF8 Deliveries Are Imminent

An Initial Public Offering (IPO) for Vietnamese automaker VinFast could happen as soon as the second quarter as talks with banking giants JPMorgan Chase & Co. and Citigroup Inc. progress toward a listing.
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The move would be a significant step forward in the company's plans to establish a manufacturing presence in the U.S. and take on homegrown electric vehicle manufacturer Tesla on its own turf. Bloomberg reported in November a Q2 IPO could raise as much as $1 billion or more for VinFast, depending on interest, of course.

No final decision has been made regarding the timing of an IPO offering, and VinFast has declined to comment on the latest news. A VinFast IPO has been rumored since 2021, and papers filed in April indicated the plans were moving forward.

VinFast is a subsidiary of Singapore-based conglomerate Vingroup and was established in 2017 by Vietnam's richest person Pham Nhat Vuong. The company manufactures its vehicles at an 828-acre (3,350,000 m2) industrial complex on Cat Hai Island near the industrial city of Haiphong, Vietnam.

The company is posturing to challenge Tesla with a line of vehicles that were designed with the help of Pininfarina, BMW, and Magna Steyr. It was the first Vietnamese company to participate in an international auto exhibition at the 2018 Paris Motor Show, where its gas-powered LUX SA2.0 SUV and the LUX A2.0 sedan, both designed by Pininfarina, were introduced.

In subsequent years, VinFast transformed into an all-electric vehicle manufacturer by introducing its VF8 and VF9 SUVs, and took its first step in establishing a U.S. presence last July, with the opening of VinFast showrooms in six California cities.

That same month, the company secured financing to the tune of $4 billion (3.7 billion euros) from Credit Suisse and Citigroup to build a facility to manufacture batteries and vehicles in North Carolina.

Europe is also on the automaker's radar as the company introduced the VF8 and VF9 at IFA Berlin in September and suggested the company would have 50 dealerships in Europe when 2024 rolls around, with 25 being in Germany.

However, the big fish lies in the U.S., and in late November, the company reached a significant milestone by shipping the first batch of 999 VF8 SUVs bound for U.S. shores. They had expected to begin making deliveries to awaiting customers by the end of the year but delayed deliveries due to the holidays.

In the months since, the company has unveiled the smaller VF5, VF6, and VF7 models and showcased its entire line at the 2023 Consumer Electronics Show in Las Vegas.

VinFast aims to make electric vehicles more affordable to a wider range of households, reducing the initial acquisition cost of a VinFast vehicle by removing the cost of the battery. Buyers will then enter into a battery subscription agreement whereby they would pay a monthly fee for the unit. For its part, VinFast would be responsible for the maintenance, replacement, and repair of the battery for the life of the vehicle. The agreement would also be transferable in the event of a sale.

This unique angle may just be a home run in the U.S. market. Americans love subscriptions and memberships and it certainly comes with a significant upside by not having to worry about the condition of their car's battery.

It remains to be seen what transpires in the coming months with regard to the IPO, but the company seems to be moving in that direction and it may become a reality quicker than initially expected.
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