Even though VinFast, a Vietnamese automotive manufacturer, continues to suffer losses, it is still on track to go public in the United States before the year is through.
In the first quarter of 2023, VinFast’s net loss increased to $599 million (RM2.7 billion), according to a recent regulatory filing in the U.S. These losses occurred when manufacturing was increased, factories were built, and expenses for marketing, sales, and maintenance were incurred. VinFast may have the financial support of Pham Nhat Vuong, the wealthiest man in Vietnam, but it still needs to develop into a successful enterprise.
According to the filing, the parent firm Vingroup JSC, affiliates, and outside lenders have invested almost $9.3 billion (RM43.2 billion) in the business since 2017. Despite this, Vuong asserts that VinFast might turn a profit after 2025 and might even achieve break-even status by the end of 2024.
VinFast should go public in the second part of the year after completing a merger agreement with special purpose acquisition business Black Spade Acquisition Co by July 20. The transaction is anticipated to give VinFast an equity value of about $23 billion (RM106.9 billion). Even if it sounds fantastic, VinFast needs to sell a lot more cars if it wants to ever become a significant participant in the automotive market.
VinFast stated in March that manufacturing at the as-of-yet unfinished facility wouldn’t begin until 2025. In the most recent filing, that reference to the time has been omitted, and all that is stated is that pre-construction work on the plant began in the third quarter of last year. The factory is anticipated to start out with a 150,000 cars annual capacity before ramping up to about 250,000 cars annually. When exactly the corporation anticipates achieving those capacity levels is not stated.