SINGAPORE – It is a familiar story: a business mogul parlaying much of his fortune into a massive bet on electric vehicles (EVs), only to fall on hard times.
Billionaire Pham Nhat Vuong is among the latest to take after Mr Elon Musk, who made it through what he famously described as Tesla’s “production hell”. Other examples include Mr James Dyson, the household appliance billionaire; Mr Jia Yueting, founder of the Netflix of China; and Mr Hui Ka Yan, the embattled property tycoon behind China Evergrande Group.
The odds that any of these players will ride out the inferno as Tesla did are looking increasingly long. Mr Dyson pulled the plug on his EV venture in 2019. Mr Jia’s Faraday Future Intelligent Electric is staring down a potential Nasdaq delisting, and Mr Hui’s China Evergrande New Energy Vehicle Group is struggling to survive.
Mr Vuong’s difficulties are proving costly. VinFast, his automaker that filed for an initial public offering (IPO) a year ago, has delayed plans to list in the United States. Vingroup – Mr Vuong’s conglomerate spanning homes, hotels, hospitals and shopping malls – and its affiliates and lenders have deployed a staggering US$8.2 billion (S$10.9 billion) to fund the car company’s operating expenses and capital expenditures in the last six years.
The return on all that investment has been meagre: VinFast sold just 93,000 vehicles and 162,000 e-scooters.
Mr Vuong has only doubled down, lining up another US$2.5 billion for VinFast, US$1 billion of which will come from him personally. This month, the company plans to start delivering longer-range versions of its VF 8 sport utility vehicles to US customers.
What is still unclear is how quickly those SUVs will catch on in what is an increasingly cut-throat EV market, with Tesla slashing prices and putting pressure on incumbents that have been around more than a century. VinFast will need to spend heavily to familiarise Americans with its brand and set up networks for distribution and retailing vehicles.
