Vietnam-Based Tesla Challenger VinFast Files For US IPO: Is It A Good Investment Bet?

Zinger Key Points
  • Another Asian EV startup is planning a US listing, which could offer diversification away from Chinese companies.
  • Vietnam's VinFast will soon commence deliveries of its electrified SUVs in the US and Europe.

Shortly after shipping electric vehicles to the U.S., Vietnamese EV maker VinFast Auto Ltd. filed for its initial public offering in the U.S.

What Happened: VinFast, on Tuesday, filed a red herring prospectus with the SEC on Form F-1, which is meant for foreign issuers of equity, without stating the price or the issue size.

The company said it expects to use the net proceeds for partially or fully repaying outstanding debt and R&D as well marketing expenses, investment in its manufacturing facilities and working capital and general corporate purposes.

The company said it intends to list its shares on the Nasdaq under the symbol “VFS.”

VinFast had about 2.41 million outstanding shares as of Sept. 30.

The proposed IPO is being managed by investment banks, including Citigroup, Morgan Stanley, Credit Suisse and JPMorgan.

See Also: Best Electric Vehicle Stocks

The Company & Financials: VinFast was set up in June 2017 in Hanoi, Vietnam, and later in 2018, it relocated to Hai Phong, Vietnam. After launching its first electric scooter model, Klara, in November 2018, the company officially launched its automobile manufacturing plant in June 2019 and began producing ICE vehicles.

It opted to halt ICE vehicle production in November 2022 in a bid to transform into an EV-only company.

For the nine months that ended Sept. 30, the company reported revenue of $439.4 million, including $367.3 million from vehicle sales. Net loss for the period widened to $1.45 million.

Why It’s Important: China, the home to many EV startups, is now facing the risk of COVID-19-related supply-chain challenges and production disruptions. Against this backdrop, VinFast could be offering the scope of diversifying away from China, while also partaking in the massive opportunity promised by the EV sector.

VinFast now plans to sell its electric SUVs in key global markets, including North America and Europe, while also serving in the domestic market. The company quantifies its total addressable market at $1.3 trillion by 2027, which could translate to shipments of 35 million units.

The company currently has two EV SUV models — namely VF8 and VF9 — focused on the global market. As of Sept. 30, the two vehicles combined together had reservations of 58,000 units. The first batch of VF8 was shipped to the U.S. in November and deliveries are expected to commence in the U.S. in December and in Europe in early 2023.

Its VF8 is a mid-size SUV and could be pitched against Tesla Inc.’s TSLA Model Y SUV.

Read Next: Vietnamese Tesla Challenger VinFast Begins Domestic Deliveries Of SUV; US Sales Will Reportedly Start In December

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