The hottest question we receive those days about Vingroup CEO Mr Pham Nhat Vuong, is whether Vinfast EV IPO will be the next Elon Musk Tesla?
For start-ups in tech Venture capitalists like Peter Thiel, Paypal co-founder with Elon Musk, here are the 7 questions testing entrepreneurs before investing in their new business.
Let’s see how Vinfast EV, launched on the Nasdaq mid august 2023 rat out of 7?
As EV carmaking is definitely a tech business from dashboard software to optimize driving to battery duration and refill speed, it is legitimate to ask if a Mr Vuong, a Vietnamese real estate oligarch business 1.0 can make it to lead new EV carmaker 3.0 business to success from a cumulated US$
1- ENGINEERING: Can you create breakthrough technology i/o incremental improvements 10x.
NO as the company was started in 2017 from scratch building their 1st factory in Hai Phong in record timing of 2 years.
All technologies and automotive used are not proprietary but rented and assembled in Vietnam. To the point the embarked software on the 999 cars shipped to the USA on 25-Nov 2022 were not working properly and this first batch were returned to Vietnam in May 2023 due to software errors not displaying critical safety information on the dashboard as per the U.S. National Highway Traffic Safety Administration (NHTSA).
2- TIMING: Is now the right time to start your particular business
NO as China slashes prices to get EU market share and Tesla also slashed their prices twice in the USA and now in the rest of the world.
As Vinfast attacks the EU and the US market, China enters à price war to get aa big share of EU market and Tesla slashes prices again on its best seller model S and X
3- MONOPOLY: Are you starting with a big share of a small market?
NO as selling cars to GSM taxi (Green and Smart Mobility), a Vingroup CEO Pham Nhat Vuong subsidiary, does not count as sales for the SEC Securities and Exchange Commissions regulating the Nasdaq and protecting investors.
Well literally yes, as Vinfast has 100% of the sales to the new launch GSM (Green and Smart Mobility) EV taxi market in Vietnam, Cambodia and Laos.
The problem is GSM belongs to Vingroup, Pham Nhat Vuong CEO. GSM all 3 markets ‘purchased’ close 50,000 Vinfast cars making the 2023 target figures promised to the Nasdaq IPO investors.
A class action was started 23-Nov-2023 in NY, USA. to which all the Vietnamese press insist it is irrelevant
4- PEOPLE: Do you have the right team?
NO as the mercenary recruiting policy to jump the next hurdle may not build the team necessary to the huge challenge of EV and green energy regulations
It is clear that the human resource ‘mercenary recruiting’ approach for quick short-term results to ‘jump the hurdle’ and discard is not the best way to build a long-term automaker with a worldclass and worldwide strong position and branding.
5- DISTRIBUTION: Do you have a way to deliver your products effectively?
NO as the first batch of 999 EV cars shipped from Hai Phong, Vietnam to the USA end Nov-2022 and recalled for security reasons 6-months later is probably the costliest recall of all times in automobile history.
As the example of 999 EV cars shipped 22-Nov-22 and returned to Vietnam for fixing 6-month later on 25-may-2023, it is not optimized one can say. In times of easy money flooding from real estate Vingroup Vinhomes, that was costly but still feasible. The shrinking real estate sales and Vietnamese banks restrictions on credit and bond issuance will make these maneuvers impossible.
6- DURABILITY: Will your market position be defensible in 10-20 years
NO, With shrinking revenue from Vingroup real estate juggernaut, flagship Vinhomes, how much longer can Vinfast EV lose US$ 1-to-1.5 billion per year?
Most cars are sold to the 100% Vingroup owned child company GSM Xanh taxi.
In the USA, the North Carolina, US$4Bn investment in Vinfast factory is stalled. Some legal class actions have started over misleading business reports to the Nasdaq and deadly accidents involving Vinfast EV.
In Europe, the EV market is fiercely competitive, with Tesla cutting prices by around 20% and Chinese manufacturers following suit with steep price reductions in the U.S. and EU markets. This intense competition has forced Vingroup CEO, Pham Nhat Vuong to shift focus. VinFast is targeting India and Indonesia with high-end EVs, despite limited demand for expensive vehicles from Vietnam in these markets.
7- SECRET: Have you identified a unique opportunity others don’t see?
NO, since 2022 official launch of the all-EV strategy, we have not seen any of the EV carmakers problems solved apart from pouring more money into the start-up venture.
If the secret is having unlimited real estate resources to finance a huge cash burning engine and a 4 billion factory to be started in North Carolina, this conglomerate mindset is definitely not a secret sauce that western capitalists adhere to as they dumped funding all conglomerates in the 1980s. Since 2017, founding of Vinfast car manufacturing and 2022 shift to full EV production, how much more beyond US$ 6 Billions cash burnt can Vingroup CEO pour in to stay alive?
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