Vietnam EV maker VinFast sees sales boom, path to breakeven

VinFast could hit break even as soon as the end of 2024 “if things go as planned,” Pham Nhat Vuong, chairman of the country’s largest conglomerate Vingroup (VIC.HM) and founder of its auto unit VinFast, told investors at the company’s annual general meeting.

Vuong projected sales of between 40,000 and 50,000 cars this year, up from EV sales of about 7,400 in 2022 when the company’s only market was Vietnam.

In addition, Vuong said VinFast planned to add two other models to its lineup: an electric pickup truck and a battery-powered city or “mini car.” The latter would be priced between $10,000 and $12,000, he said, making it an ultra-low-cost EV.

It was the first outlook VinFast has offered since announcing earlier this month it would list in the United States via a merger with special purpose acquisition company (SPAC) Black Spade Acquisition Co (BSAQ.N).

It has previously missed some of its internal delivery targets.

The company also faces competition from established rivals led by Tesla Inc (TSLA.O)that have been driving prices down and bringing a range of new EVs to market amid a weakening global economy.

“When the market is robust again and sentiment improves…VinFast will bring back financial happiness,” Vuong said.

VinFast, which is looking to break into the U.S. and European markets, had earlier received funding pledges of $2.5 billion from Vingroup and Vuong, Vietnam’s first billionaire.

The company said as of the end of last year it had provided just over $8 billion to VinFast, which has not yet made a profit.

‘Fundrasing opportunities’

VinFast’s SPAC deal is expected to close in the second half of 2023.

Vingroup said in a written presentation at the meeting that the listing “opens up potential fundraising opportunities for Vingroup in general and VinFast in particular from the global markets.” It did not provide further details.

VinFast delivered its first model, the VF 8, to customers California in March after delays and the company’s disclosure that the car would have a lower battery range than it had flagged to buyers.

The company shipped a second batch of VF 8s that arrived in California last week that it said would have a longer battery range.

VinFast, which began operations in 2019, has a plant in Vietnam and plans for a second plant to open in North Carolina in 2025.

In Europe, where VinFast has not yet begun deliveries, it will face off against a growing range of Chinese-made EVs from the likes of BYD Co Ltd (002594.SZ), NIO Inc (9866.HK) and Zeekr, a unit of China’s Geely (GEELY.UL).

An electric pickup truck would face competition from Rivian Automotive Inc (RIVN.O), Ford Motor Co’s (F.N) F-150 Lightning and other models. The entry-level, small EV would face competition from Chinese-made electric vehicles, including from BYD.