VinFast’s electric vehicles are parked at a store in Los Angeles before delivery to their first customers, March 1, 2023.
Lisa Baertlijn | Reuters
Vietnamese electric vehicle maker VinFast’s ambitious plan to deliver as many as 50,000 vehicles this year is “unrealistic”, according to an analyst.
VinFast said it expects to deliver 40,000 to 50,000 vehicles in 2023 despite a weak global economy. That’s almost seven times the 7,400 electric vehicles it sold last year, all in Vietnam.
The company delivered just 11,315 vehicles in the first half of this year, of which 7,100 were sold to Green and Smart Mobility, a Vietnamese taxi company controlled by parent company Vingroup, the company said during its second-quarter results on September 21. In April, Green SM launched a pure EV taxi service in Vietnam with VinFast models.
Shares of Vingroup, one of Vietnam’s largest conglomerates, closed at 45,200 VND ($1.85) on Wednesday, the lowest level since November 2017, according to Refinitiv data.
“More than 50% of EV volume in the first half of 2023 was for a related business, while US volume was less than 200 units, raising serious concerns about VinFast’s EV demand,” said Shifara Samsudeen, equity analyst at LightStream Research, in a report published on SmartKarma.
Through June, only 137 VinFast EVs — all VF8 SUVs — were registered in the U.S., according to automotive data provider S&P Global Mobility, which CNBC confirmed.
Meanwhile American rival Tesla and that of China XPeng delivered 889,015 and 300,145 electric cars respectively in the first half of the year.
“VinFast’s ambitious EV plan appears unrealistic. VinFast appears unlikely to meet its 2023 target of 50,000 EVs and our revised forecast suggests there are further downsides, despite shares falling more than 50% from the IPO,” said Samsudeen.
In response to CNBC’s request for comment, VinFast said it is “ramping up production to ensure delivery targets in international markets.”
“In addition, VinFast will soon expand to the Southeast Asian and Middle East markets, which will also boost our production,” the company told CNBC.
VinFast, which has yet to turn a profit, began trading on the Nasdaq on August 15. The stock price rose more than 250% on its first day of trading, but has since fallen more than 60%.
VinFast has stepped up its expansion outside Vietnam this year, in a bid to compete with automakers globally.
“We have established our operational facilities, including a sales network in Vietnam, North America and Europe, and in the future we plan to expand our coverage to the Asia Pacific, the Middle East and other potential markets worldwide,” said Lê Thị Thu Thủy, CEO of VinFast. during the company’s second-quarter earnings call.
“We have ambitious plans to deliver seven models in Vietnam, North America, Europe and Asia in 2023 and 2024, including delivery of the VF9 in North America by the end of the year, and the first delivery of the – the VX6 later. this year and – the VX7 and VF3 in 2024,” said Lê.
Analysts also noted that VinFast’s models are not competitively priced. For example, VinFast’s VF9 model costs $83,000, while the Tesla Model
Additionally, Tesla passenger vehicles are eligible for a $7,500 federal tax credit in the US, while VinFast vehicles are currently ineligible because they are not built in the US.
“[This suggests] that it may not be as easy as said to increase sales volume in the US and other foreign markets as more established EV models are sold at a lower price,” said Samsudeen.
“Our experts have questioned VF9’s pricing decision in the US market. It is more expensive than key, more established competitors such as the Kia EV9 and the Tesla Model X, despite its platform being derived from an internal combustion engine, which compromises performance and range. Bryne said.
VinFast told CNBC that “experts have carefully examined our vehicles and priced them correctly.” It also said it does not consider some of these vehicles listed as their competitors, without specifying models.
During the second quarter, VinFast posted a net loss of $526.7 million, an improvement of 8.2% from the same period a year ago.
VinFast expects to break even by the end of 2024, founder Pham Nhat Vuong reportedly told investors at the company’s annual general meeting in May.