‘Money not end goal for EV manufacturing’: Vingroup chairman

"If it were just for money, the board of Vingroup would not dive into a sector as difficult as manufacturing electric cars," the country’s richest man told shareholders at Vingroup’s annual general meeting on Wednesday.

The meeting was held just a few days after its unit VinFast announced that it would list in the U.S. via a merger with a special purpose acquisition company.

"Once we are successful, we are obliged to contribute to the country by building a high-tech brand with class and global influence," he told a shareholder who asked why the company decided to make cars.

At the end of last month, Vingroup and Vuong personally said they would fund VinFast’s expansion with a $2.5 billion cash pump, as the auto manufacturer has been reporting losses in its five years of establishment.

Despite shareholder concerns, Vuong showed high confidence in the endeavor.

"In terms of business, VinFast is a project with good potential, and can even be considered Vingroup’s best project," he said, adding that the valuation of VinFast would not stop at $23 billion.

Vuong said that VinFast started out by making gasoline-powered cars because five years ago electric vehicles were not popular, and the company was not ready in terms of technological capability.

"We made gasoline cars so people knew we could make cars. After electric cars became a trend, we decided to put all our resources into making them," he said.

"The suspension of previous projects, such as the production of smartphones and gasoline-powered cars, was necessary to focus on the new business priority."

Shareholders were also worried about competition from Chinese manufacturers. China’s electric car maker BYD said recently it planned to set up a plant in the northern province of Phu Tho.

The chairman of Vingroup, however, seemed unconcerned.

He said that Chinese brands had their own group of customers, and VinFast also had its own. No company can claim the whole market, he added.

"As long as VinFast can make good and suitable products in Vietnam, many people will be its customers. I am not concerned about the Vietnam market," he added.

Vingroup targets a revenue surge of nearly 90% from 2022 to VND190 trillion this year, while post-tax profit is eyed to go flat at VND2 trillion.

The company will strive to deliver its electric cars on time to customers in the U.S., one of its key international markets. It will also continue to speed up a plan to build a manufacturing plant in North Carolina.

In other businesses, Vingroup seeks to branch into social housing with its Happy Home projects, and to increase its number of Vincom malls by two to 85.