VIETNAM, SOUTH Asia — A business mogul loses his money betting on electric vehicles. Pham Nhat Vuong is the latest PayPal mafia member to attack Elon Musk, who survived Tesla Inc.’s “production hell.” Hui Ka Yan, China Evergrande Group’s controversial property mogul, James Dyson, and Jia Yueting, Netflix of China’s founder, are more instances.
These players are unlikely to survive the flames like Tesla. Dyson ended his EV venture in 2019. Faraday Future Intelligent Electric Inc. faces Nasdaq delisting. Hui’s China Evergrande New Energy Vehicle Group Ltd. is struggling. Vuong’s issues are pricey. His automaker, VinFast, has delayed its US IPO. Vingroup JSC, Vuong’s conglomerate of residences, hotels, hospitals, and shopping malls, and its affiliates and lenders have spent $8.2 billion on the car company’s operations and capital spending over the past six years.
Vuong has raised additional $2.5 billion for VinFast, $1 billion of which is his own. US consumers will receive longer-range VF 8 SUVs this month. VinFast sold 93,000 automobiles and 162,000 e-scooters. In an increasingly competitive EV market, with Tesla reducing prices and pressuring century-old stalwarts, how soon those SUVs will catch on is unknown. VinFast will need to invest extensively to educate Americans with its brand, create up distribution and retail networks, and overcome Musk’s struggles mass producing cars.
Vingroup declined to comment beyond last month’s assertion that Vuong will redouble his investment commitments to VinFast. “Can VinFast run a marathon and sacrifice the short term for the long term?” wonders Honolulu-based Asia-Pacific Centre for Security Studies power politics and Vietnam scholar Alexander Vuving. He predicted long-term losses for the corporation.
According to Bloomberg Billionaires Index, Vuong, 54, is Vietnam’s richest man with $3.9 billion. While studying in Moscow, he founded a business and departed with $40,000 in debt. He sold his Ukrainian dried-foods company to Nestle SA in 2010 for an undisclosed amount. After founding VinFast, Vuong publicly stated his desire to sell vehicles in the US and his willingness to spend $2 billion to do so. In January, VinFast said it would stop developing gas-powered automobiles. President Joe Biden praised its $4 billion North Carolina EV plant plans in March. It filed a discreet IPO the following month.
However, the company’s leadership was in turmoil. VinFast’s global CEO, Michael Lohscheller, a former Opel executive, lasted barely months. The business stated Lohscheller quit for personal reasons in December 2021. He joined Nikola Corp. months later. At a Vingroup shareholder meeting weeks following its confidential filing, Vuong warned VinFast might delay the IPO until 2023 due to supply-chain concerns and market uncertainty. The parent company gave Bloomberg and other reporters tours of its vehicle manufacturing in Haiphong, north of Hanoi, and served champagne and lobster to journalists, influencers, customers, and business partners.
According to unidentified sources, some arrived at the Port of Benicia in San Francisco Bay without batteries. The company stated the vehicles were fine and that batteries decrease during shipment due to factors like doors not being fully closed. Mixed reviews. Jalopnik termed VinFast’s SUV “simply not ready for America.” Car and Driver noted certain “quirks” the accelerator was jumpy in one vehicle and laggy in another but called them “prototype pains.” The Autopian wrote: I Drove A VinFast VF8 And It Wasn’t As Bad As I Expected. VinFast sent its first 999 EVs to California in November during a Haiphong port ceremony.
Biden’s groundbreaking climate bill hurt VinFast, but he promoted the company’s US production plans. VinFast has cautioned that its North Carolina factory won’t start production until 2025, but the Inflation Reduction Act will assist businesses with EV and battery operations. VinFast delayed client delivery from December to January and February. Late that month, the business cut initial lease customers’ monthly payments in half to $399. On March 1, it delivered its first 45 SUVs to California customers and now has 310 US vehicles, with another 100 coming soon.
According to Bloomberg Intelligence’s Hong Kong-based automotive analyst Steve Man, building distribution, replacement part, and service networks would be difficult, but without them, buyers won’t have confidence that their vehicles can be serviced. “The Inflation Reduction Act really puts a lot of pressure on them, because it undermines their cost and price advantage that they probably wanted to have until they can have manufacturing here, which is incredibly expensive,” said Gartner auto analyst Mike Ramsey. They were hampered by the IRA and the difficulty of expanding into a distant market.