Want A VinFast Franchise? It’s a Risky Bet

Want A VinFast Franchise? It’s a Risky Bet

May 8, 2024 — In late April, headlines across numerous media outlets reported that Vietnamese electric vehicle automaker VinFast has added 12 dealerships, bringing its total to 16 (five of which will open this quarter) across seven states. This is in addition to the 15 stores it owns in California. Several more franchised stores should be announced in coming months.

VinFast sold just under 1,000 vehicles in the U.S. in the first quarter — about 10% of the company’s overall 9,689 global sales, down 28% from the previous quarter. 

About 56% of its sales were to companies related to VinFast in the first quarter, down from 72% last year, as reported by Hunterbrook Media(The Banks Report also reported in January that most of VinFast sales last year were to companies affiliated with its founder).  

It reported a net loss of $618.3 million in the first quarter, a 12.3% drop from the previous quarter. Revenue was up nearly 270% year-over-year, but declined $134 million from the fourth quarter.

Founded in 2017, it is part of Vietnam’s largest conglomerate, Vingroup, controlled by Pham Nhat Vuong, one of the country’s wealthiest business leaders.

It went public on August 15 via an SPAC deal with Black Spade. The IPO valued VinFast at an unrealistic $23 billion, but then the silliness took over. Within a couple of days, the company was valued at more than $85 billion—more than General Motors, Ford, or BMW.

Within 10 days, VinFast’s valuation had jumped to more than $230 billion. But now, it is trading under $3 a share with a market cap of $7 billion.

VinFast’s challenges include questions about its long-term viability in the U.S., where other startup EV manufacturers have failed to gain much traction. The price war among Chinese EV automakers also hurts. 

It likely will have to raise more money, even after Vuong, who owns about 98% of the company, promised a few weeks ago to inject $1 billion of his own wealth into VinFast, following a $2.5 billion promise last year. 

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