Thayer Consultancy Background Brief:

ABN # 65 648 097 123

VinFast, Electric Vehicles and
U.S.-Vietnam Relations
August 28, 2023

Do you have any assessments on VinFast recent developments?

According to our sources, President Joe Biden will come to Vietnam on Sept 10th or
Sept 12th, but we are not sure 100%.
Vietnamese auto maker VinFast has started construction of an EV factory in North
Carolina, marking an important step in the company's strategy to expand its market.
Moreover, this company has just celebrated an historic achievement on August 15
after listing and initiating the trading of its shares on the Nasdaq Global Select Market.
Under the ticker “VFS”, VinFast now holds an impressive equity value in excess of $23
billion.
The move officially crowns VinFast as the largest Vietnamese company to be listed on
the US stock market, establishing its presence with significant market capitalization.

Q1. How do you evaluate the success of VinFast and its impact on the economic
cooperation relationship between the U.S. and Vietnam in general?
ANSWER: VinFast’s decision to target the American electric vehicle (EV) market, by
exporting from Vietnam and manufacturing in the United States, is a bold initiative
that is not without its risks.
VinFast scored a major triumph in getting listed on the Nasdaq in August and thus
gained attention in the United States. VinFast’s shares immediately sky rocketed, then
fell and then recovered ground. Investors are clearly interested in what VinFast has to
offer.
VinFast has already exported 3,000 EVs to the United States and opened a number of
show rooms in California. In August, VinFast received a boost when the U.S.
Environmental Protection Agency gave a range rating of 330 miles to the VF9 Eco trim
model and a range rating of 291 miles to the Plus trim model. VinFast plans to export
the VF9 model to the U.S. this year.
VinFast’s facilities in Vietnam produce 300,000 EVs a year; this will be augmented
when the multi-billion manufacturing plant being built in North Carolina begins
production in 2025. This plant is expected to produce 150,00 EVs a year.
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VinFast’s success is based on three factors. New EV start-ups have difficulty in

attracting capital investment. VinFast overcame this problem because it is financed by
the VinGroup and because it merged with Hong Kong’s Black Spade Acquisition just
prior to applying for listing on the Nasdaq. Black Spade in a special purpose acquisition
company a so-called “blank cheque” partner.
VinFast was valued at $113 billion in mid-August or greater than the capitalisation of
two other listed EV makers Rivian ($21 billion) and Liucid ($16 billion). VinFast’s
capitalisation is greater than all EV start-ups in the U.S. combined. VinFast now ranks
second in value behind EV maker Telsa ($730 billion).
A second factor is that VinFast has been producing EVs for over five years and currently
has over 20,000 EVs on the road. VinFast has been able to introduce improvements to
its vehicles and develop reliable supply chains.
A third factor is that VinFast’s manufacturing plant in Vietnam is ultra-modern.
VinFast faces a number of risks. So far VinFast has not turned a profit since it began
operating. In 2022, VinFast reported a net loss of $2.1 billion. VinFast posted a loss of
$1.4 billion in the first three quarters of this year.
The value of VinFast shares may not reflect the actual value of the company as most
of the shares are held by its owner, Pham Nhat Vuong, and not traded on the stock
exchange. Also, Bloomberg reported that shares in EV companies that listed through
special purpose acquisition companies later fell in value.
VinFast will face stiff competition from other EV manufacturers such as Telsa who are
providing a range of new EVs and driving down prices. Registration data reviewed by
S&P Global Mobility reveals that only 123 VinFast EVs were sold in the U.S. as of June
this year.
VinFast will have to overcome initial media criticism after the first batch of VF8 EVs
arrived in the United States in late 2022. VinFast was forced to recall its EVs after the
National Highway Traffic Safety Administration warned of a software error that
increased the risk of a crash.
On the positive side, VinFast sold 11,300 EVs in the first half of 2023. Chairman of the
VinGroup Vuong told shareholders in May that VinFast expected to sell 50,000 EVs this
year and break even by the end of 2024.
Both the Biden Administration and the Vietnamese government are committed to
green energy transition and this privileges the manufacture of Electrical Vehicles.
Chairman Vuong’s decision to give priority to the American market may prove to be a
success story.

Suggested citation: Carlyle A. Thayer, “VinFast, Electric Vehicles and U.S.-Vietnam

Relations,” Thayer Consultancy Background Brief, August 28, 2023. All background
briefs are posted on Scribd.com (search for Thayer). To remove yourself from the
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.