Enter the global electric car market: Vietnam's richest man bets more than $10 billion

Through risk-taking, Pham Nhat Vong, Vietnam's richest man, has become the owner of a fortune of more than $4 billion. He has now ventured into Vietnam's first global automaker, VinFast Auto, and invested more than $10 billion to turn the company into a successful brand in the global electric car market. However, the company's path has been far from smooth and there are doubts whether it can compete outside its home country. Despite this, VinFast's CEO, a former banker, is full of confidence. "Our mission is to make electric cars accessible to everyone," says Le Ti Thu Thuy, 49.

VinFast sets aggressive goals

Including selling 1 million electric cars worldwide in''within six years. (Tesla took 17 years to do so.) After investing nearly $10 billion to develop several electric vehicle models, build charging infrastructure, and build a fully automated plant in Vietnam, the company plans to invest another $1.8 billion over the next three years to launch plants in the U.S. by 2025 and in Indonesia and India by 2026. Of this amount, $1.4 billion is earmarked for the first phase of the North Carolina plant, which is currently under construction. The aim is to take advantage of government subsidies and tax incentives in these locations and increase the group's annual production capacity to approximately 550,000 units by 2026 from the current''s capacity of 300,000 units at its sole plant in Vietnam.

Sales in the U.S. and going global

At the moment, VinFast is a minor player in the huge U.S. market.

Difficulties and competitiveness

The company's sale to a subsidiary indicates a lack of demand, said Fatima Shifara Samsudin, a Colombo-based analyst, on the SmartKarma platform. Separately, she notes that the company will "face challenges in selling its electric vehicles in global markets." In the U.S., sales of a compact SUV called the VF 8, the only available model, suffered due to an embarrassing recall in May, after two months since sales began. VinFast says it voluntarily recalled the vehicles to fix a software bug after the U.S. National Highway Traffic Safety Administration warned the''s charging, the VF 8 is behind the claimed range of three comparable models that have a full range of at least 482 kilometers. "The prices of our vehicles are no higher than those of our competitors," says Thuy. "The prices already include advanced technological features." For example, VinFast cars are equipped with an advanced driving assistance system that assists drivers when changing lanes and automatically parks the car.

Prospects and Investments

David Byrne, a Hong Kong-based analyst with research firm Third Bridge, believes it will take time for VinFast to gain market success in North America and Europe because of the challenges following the launch of the VF 8 model in the U.S. this year. "If they're going to sell a significant number of cars, they''expects VinFast to reach break-even point next year and become profitable by 2025.