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VinFast is set to use the money to expand its footprint in the rapidly growing US. EV market. It plans a $2 billion investment to build the North Carolina factory.
On Thursday, April 7, Vietnamese automaker VinFast said that its Singapore-based holding company has filed for an Initial Public Offering (IPO) with the US securities regulator. This comes as VinFast plans for a quick expansion into the US and European markets.
Following the strong success of Tesla and demand for electric vehicles, EV startups have been rushing to file for IPO. VinFast is betting big on the US market with a plan of spending $4 billion on its first US factory complex.
But as per the company source, VinFast is currently willing to raise $2 billion from the IPO. VinFast also said that the size and price of its proposed IPO offering isn’t finalized yet. The anonymous source told Reuters:
“VinFast is moving ahead with its plans but the timing of the IPO is very much open. There needs to be a window to get the IPO done and it could easily take a couple of months.”
However, VinFast shall be facing tough competition from legacy automakers and other startups in America.
Setting Up Its Footprint in the US Market
VinFast clearly isn’t a much popular name in the US but it seeks to become one. Launched back in 2017, VinFast became Vietnam’s domestic car manufacturer as its gas-powered models reached consumers in 2019.
By late 2022, the company is planning for a complete shift to electric vehicles. The company will soon showcase its new VF8 battery-powered SUV.
The company said that the initial public offering (IPO) will take place after the SEC completes its review process. “There are options to look at. We are still considering a lot of options,” Chief Executive Le Thi Thu Thuy. She further said that the IPO was previously planned for the second half of this year. One of the options the company is evaluating is to fund a plant planned in North Carolina and US expansion.
Last week, VinFast said that it has signed a preliminary deal to invest its first $2 billion to build the North Carolina factory. This factory will focus on making batteries for electric vehicles, sports utility vehicles, and electric buses.
In the first phase of factory completion, the company plans to produce 150,000 vehicles annually. It will likely be completed by July 2024.
The source familiar with the matter said that the valuations look stretched in current markets. “Even the companies that have gone ahead with US IPOs have had a sharp correction in valuations, so that’s a given,” he added.