On the first day of listing, the market value exceeded that of the three major American car manufacturers! The dreams of Xu Jiayin and Jia Yueting have been realized by this Vietnamese man.

The same "car-making dream" led to different outcomes. Xu Jiayin and Jia Yueting failed, while Vietnam's richest man, Pham Nhat Vuong, succeeded.

Overnight, VinFast, the Vietnamese car brand of the new forces in the automotive industry, merged with a SPAC and debuted on NASDAQ. On its first day of trading, the stock price soared, closing at $37.06, a 254.64% increase.

VinFast's market value skyrocketed to $85 billion, surpassing the combined value of NIO and Xpeng, and surpassing Ferrari, Ford, GM, and BMW.

Pham Nhat Vuong and Xu Jiayin have similar backgrounds and dreams - to become the richest through real estate and pursue the dream of car-making.

With a pragmatic approach and steady progress, Pham Nhat Vuong turned his dream into reality, and VinFast entered the global market with technology that was not particularly advanced.

Pursuing the "car-making dream"

Pham Nhat Vuong, a poor boy who turned his life around through real estate, changed his destiny through industry.

In the 1960s, Pham Nhat Vuong was born into an ordinary family in Ha Tinh Province, Central Vietnam. Diligent and studious, he was admitted to the Hanoi University of Mining and Geology and later went to Moscow as a government-sponsored student.

In Ukraine, Pham Nhat Vuong embarked on the path of entrepreneurship, starting with a restaurant and making a fortune by selling instant noodles, earning his first pot of gold.

In 2001, with the rapid development of the Vietnamese economy, he returned to Vietnam and started his real estate business. With the belief that "entrepreneurship is about attacking, not defending," he successively established shopping centers, office buildings, resorts, and dominated the real estate industry in Vietnam, becoming the country's richest man.

As for why Pham Nhat Vuong entered the car-making industry, looking back at his investment strategy: he likes tangible assets. Among the "clothing, food, housing, and transportation," the latter two have more potential to become "assets." Besides houses, the only thing left is cars.

Therefore, in 2017, Pham Nhat Vuong's Vingroup officially announced its entry into the new car-making industry and established VinFast as Vietnam's first domestic automaker.

In the barren Vietnamese automotive industry, how did VinFast go from zero to one and gradually enter the global market?

Steady Progress and Pragmatic Approach

VinFast's path to growth has been steady and pragmatic. Pham Nhat Vuong decided not to rush and started with conventional fuel vehicles before transitioning to intelligent and electric vehicles. At that time, the Vietnamese independent automobile market was a blank slate. The country's automobile industry had long been stuck in the assembly and OEM stages. Prior to Vinfast, Vietnam had no independent automobile brands and no impressive technology to speak of.

Pan Ri Wang's specific tactical route was to rely on "buying, buying, buying," "collaborating, collaborating, collaborating," and "forming circles, forming circles, forming circles," which meant buying technology, comprehensive cooperation, and establishing a circle of supplier friends.

For Vinfast's fuel vehicles, apart from the logo personally designed by Pan Ri Wang, everything else was acquired through collaboration. The design was done by Pininfarina Design Studio (known for designing multiple Ferrari sports cars); the powertrain and chassis were acquired from BMW (previous generation X5); engineering and process development relied on OEM giant Magna; and the transmission came from ZF 8AT (used in various BMW models).

In the electrification phase, Vinfast obtained battery-related technology from Chinese suppliers. In late October 2022, VinFast and CATL announced the signing of a global strategic cooperation memorandum of understanding, which will involve cooperation on skateboard platforms (CIIC) and other projects. In November, Vingroup's battery manufacturing and research company, in a joint venture with CATL, broke ground on a factory mainly producing lithium iron phosphate batteries with an annual capacity of 5 GWh. It is expected to start mass production in the third quarter of 2024.

Since the start of automobile production in 2019, as of the end of September 2022, VinFast has delivered nearly 88,000 vehicles, with the majority being fuel vehicles. Among them, 24,200 vehicles were sold in 2020 and 35,600 vehicles were sold in 2021, accounting for approximately 11% of the market share in Vietnam.

In terms of overseas markets, VinFast has exported approximately 2,100 electric vehicles to the United States and nearly 800 electric vehicles to Canada.

With this pragmatic approach of "borrowing" technology, Vinfast has ultimately entered the global market despite not having advanced technology.

Challenges Ahead

However, for Pan Ri Wang, the road ahead is not smooth. The massive costs and substantial losses associated with the electrification and intelligentization plans are significant challenges.

According to the data disclosed in the prospectus, in the first three quarters of 2020, 2021, and 2022, this Vietnamese "new force" achieved operating revenues of $576 million, $1.603 billion, and $439 million, respectively. The automotive revenue in 2022 showed a year-on-year decline.

At the same time, the company incurred losses of $800 million, $1.348 billion, and $1.445 billion in the respective reporting periods. Despite a decline in revenue, the scale of losses continues to expand.

In addition, after entering the international market in the future, Vinfast will not only face the demands and regulations of the European and American markets, but also have to engage in a direct battle with numerous Chinese car manufacturers in the new market. Before becoming a competitor to Tesla, Vinfast will have to first contend with companies like BYD and countless other "Weixiaoli"...

By then, Pan Ri Wang and Vinfast will have to face even greater challenges.