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Asian Angle | Vietnam’s VinFast appears to be going places. But its US entry reveals issues under the hood
- VinFast has been getting lots of hype, but it has many underlying problems – including poor finances, opaque governance and a reliance on relationships with the government
- The US has a stronger market and regulatory environment, which could sink the Vietnamese EV maker’s hopes of a turnaround
Reading Time:4 minutes
Why you can trust SCMP
Vietnamese electric vehicle (EV) maker VinFast has been making headlines recently, from its recent Wall Street IPO that briefly valued it higher than Ford or GM, and a groundbreaking announcement of a US$4 billion plant in North Carolina, which garnered a tweet from US President Joe Biden.
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The firm’s stock price surged 312 per cent last week, though only 1 per cent of shares were traded. Even after a 50 per cent plunge in the stock price since Monday, VinFast is valued at US$95 billion, making it the second-most valuable EV maker in the world, after Tesla.
Since 2022, VinFast has only produced EVs, but due to strong competition, it has found it difficult to establish itself in the Vietnamese car market, which has sales of roughly 400,000 vehicles annually.
Despite the hype, they’re likely to fail for two reasons.
Cutting corners
First, they only got this far by cutting corners, which might be possible in the crony-capital world of Vietnam, but it won’t work in the United States.
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