VinFast expects electric car and scooter sales to an affiliated ride service owned by its founder to continue into 2024 and has not extended any financing or special discounts for the business, VinFast’s chief executive said.
VinFast has sold about 13,000 electric cars over the past two quarters to Green SM (GSM), a Vietnam-based taxi operator and leasing provider 95% owned by VinFast’s billionaire founder, Pham Nhat Vuong.
Those sales represented about two-thirds of VinFast’s EV sales over the first two quarters reported since its Nasdaq listing, and the large share of sales to Vuong’s venture prompted questions from analysts and investors on the company’s most recent earnings call.
In an interview, VinFast CEO Le Thi Thu Thuy said VinFast had not provided any financing to GSM. She said the company extended the same 10% fleet discount it would offer on any such transaction and expected more customers would consider a VinFast EV after experiencing the ride as a passenger.
“For the next two quarters we still see GSM having demand for our vehicles, both EVs and e-scooters,” Thuy said. “That is going to continue into the end of the first quarter, even maybe the second quarter next year.”
She added: “The terms are exactly like the other business-to-business customers.”
VinFast has previously said GSM had committed to deliveries of 30,000 electric cars and 200,000 electric scooters over two years starting from March this year.
“GSM is a good business and is an independent entity,” Thuy said.
A VinFast survey showed riders who had experienced a ride in a VinFast taxi operated by GSM were four times more likely to buy than customers who took standard test drives, she said.
GSM launched Vietnam’s first pure EV taxi service earlier this year. The company also has overseas expansion plans, starting with Laos.
In response to a question from Reuters, Nguyen Van Thanh, head of GSM, also said the fleet operator had not been given any financing or special discount.
“Our strategic cooperation is based on the shared vision and goal of promoting sustainable mobility,” Thanh said.
GSM has said it plans to expand beyond Vietnam and Laos to markets including India, Indonesia and the United States. Thuy said those plans represented a growth opportunity for VinFast.
VinFast announced an earlier deal to supply 2,500 EVs to U.S. car subscription service Autonomy. Thuy said no deliveries had been made to Autonomy yet, and that VinFast was “working on options for contract execution.”
After a stellar debut in mid-August, VinFast’s shares have lost 84%, trading at $5.97 as of Wednesday’s close as more shares are soon expected to hit the market. Vuong indirectly controls around 96.6% of VFS.
Reuters