VinFast is considering delaying its IPO until 2023

vinfast is to build EV factory
VinFast Lux A2.0 car showcased at the Paris Motor Show. Paris, France - October 2, 2018. Image by VanderWolf Images | Bigstockphoto

VinFast, the auto arm of Vietnam’s Vingroup conglomerate, is considering delaying its initial public offering (IPO) until 2023 due to market uncertainty, according to recent reports.

The IPO was originally slated for the latter half of this year, but with current market conditions, it may be pushed back to next year, said chairman Pham Nhat Vuong.

“We are eyeing a Q4 IPO, but there are lots of ongoing market uncertainties now… If necessary we may delay it to next year,” Vuong said.

Current challenges include obtaining parts from China, which has been hit hard by a new wave of COVID-19.

“Chip factories in Shanghai are closed – therefore chip supplies have been disrupted and the same story for other parts,” Vuong said.

However, he reassured shareholders that the startup would proceed with the IPO “no matter how uncertain the market.”

According to Vuong, the IPO is not just aimed at raising funds, but also about marketing VinFast’s products globally and claiming the company’s position in the market.

In early April, the carmaker announced its plans to build a factory in the United States with an investment of $4 billion. The facility, which will have an annual production capacity of 150,000 vehicles EVs per year, is expected to start construction this year and production by 2024.

The facility will be located in North Carolina, where it will build the battery-powered VF8 and VF9 SUVs. Previously, VinFast announced that it would begin exporting the two EVs to the United States later this year from Vietnam.

VinFast is also expecting to create as many as 7,500 jobs in the state, which will help drive the state’s economy forward and help support its goals of becoming a leader in the clean energy space, according to North Carolina Governor Roy Cooper.

According to a recent report by Allianz, the global EV market is booming. In 2021, sales doubled and market share reached around 8%. Analysts are positive that this momentum will continue, with an estimated growth of +50% in 2022.

However, the strong sales growth should be accompanied by accelerated investments in charging infrastructure. Allianz notes that investments in charging – both public charging and home charging – need to pick up the pace in order to sustain the transition.

Furthermore, the limited supply of lithium – a key commodity in traction batteries – is a risk that needs to be addressed. Investments in new lithium mines and recycling of used batteries will need to be ramped up, Allianz added.

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