Shares of VinFast Auto (VFS) soared in its first day of trading. The Vietnamese EV maker went public via a SPAC deal with Black Spade. VinFast CEO Madame Thuy joins Yahoo Finance Live to explain the opportunity the company sees in the U.S. auto market.
“If you take the view that the whole world is moving from the internal combustion engines and there are not enough EV models for the market segment… there’s still a lot of room for new players,” Thuy says. “With the range of EVs that fit different segments of the market, we believe that this is an opportunity for us here.”
Thuy also discusses VinFast’s battery subscription model and the path to profitability.
– Shares of Vietnamese EV maker VinFast making a big splash in its NASDAQ debut, the stock trading under ticker VFS getting a pop-up more than 35% after opening at $22 a share. The listing through a SPAC merger comes after the car maker delayed plans for a traditional IPO last year. The firm founded six years ago as part of Vietnam’s largest conglomerate Vingroup. The company started producing electric vehicles in 2021 and currently has four models in production, with two more on the way.
Let’s bring in VinFast CEO Thuy Le. Madame Thuy, it’s good to talk to you today. Congratulations on the listing. This feels like a long time coming considering that you had to delay the initial IPO listing. You said you came to market through a SPAC because you wanted it to happen now. Why was the timing so important?
THUY LE: First of all, thank you very much to have me here today. It’s a very exciting day for VinFast because we’re very thrilled that we reached the milestone of getting the company listed in the US. This is the goal that we’ve been working toward for the last two years. So we achieved it today.
The listing of VinFast on the Stock Exchange in the US is important because it’s another milestone to become a global company. So this is important day for us.
– Yeah, the big step you’re taking as a global company here in the US. You’ve already broken ground on that plant over in North Carolina, the first manufacturing plant for VinFast outside of Vietnam. Why compete in the US market?
THUY LE: We think that the US market has a lot of opportunities, and with the wide range of vehicles from the small vehicles like we have three to the big three rows like SUV like VF9, we feel like we have a whole lineup of vehicles to make EVs accessible to everyone. So building the sustainable mobility the green mobility is our mission.
– With that said, you’re coming into a very crowded market dominated by Tesla, but of course, you’ve got a lot of companies coming in, whether that is GM, Ford, Rivian. I mean, there’s a long list here. What does VinFast have to offer that this market currently doesn’t have?
THUY LE: We think that if you take the view that the whole world is moving from internal combustion engines to EVs and there are not enough EV models to meet all the market segments, it’s actually there’s still a lot of room for new players like us. With the wide range of EVs that fit different segments of the market, we believe that there’s an opportunity for us here.
– You’ve got an interesting model that has really taken shape over in Asia, which is a battery subscription model. Essentially you take out the price of the battery and then allow the drivers to buy the battery or at least lease the battery on subscription for a monthly fee. Is the plan to introduce that in the US as well because I know that that’s kind of shifted over the course or at least on the road to this listing?
THUY LE: Yeah, we started out with the battery leasing model in Vietnam as well as in international markets. And we’re still doing that in Vietnam today. Like you rightly pointed out that it makes transition to EVs a lot easier by bringing down the upfront cost. However, in certain markets like the US, it’s more developed, and there’s challenges with getting financing to the consumer using that model. So we’re still using it, but most of the sales has been on the model with where the battery is attached to the vehicle.
– That model for battery subscription battery swapping, though, is that something that you think could take hold in North America? We’ve seen it popularize over in China but hasn’t necessarily hit the market here in the US.
THUY LE: Yeah, the market in the US, where you have financing for vehicles very, very developed. The model might not be as popular as in the markets like in Vietnam, where consumer financing for the vehicle is not as developed. And also, I think we try to make that model work with some of the banking partners here in the US, but we also face some challenges with implementing the model.
– We have seen, in terms of your financials, widening losses as you look to invest and expand this footprint. The chairman of your parent company Vingroup has said that he expects VinFast to be profitable by 2025 if things run smoothly. What does that path to profitability look like?
THUY LE: I think we are on track to achieve the plan that we set out for. I mean, we have invested a lot. I mean, so far, our shareholders have invested almost $10 billion into the company. We got the commitment of $2.5 billion more from Vingroup and our chairman, and we have made significant investment in the company in order to get to the whole lineup of vehicles that we have the facility in Vietnam now the manufacturing facility here in North Carolina. So we believe that with all the investments and the strategy that we have pursued, we are on the right path to profitability.
– VinFast CEO Thuy Le. It’s good to talk to you today. I really appreciate you joining us from the NASDAQ.
THUY LE: Thank you so much for your time. Thank you.