Good morning! I hope those of you in Vietnam had a great holiday - I enjoyed a few days of much-needed relaxation in beautiful Phú Yên.
Hello to all new readers, and welcome to the latest edition of the Vietnam Weekly, written by Ho Chi Minh City-based reporter Mike Tatarski. Today’s newsletter is free to read, as is every Friday post.
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The Vietnam Weekly Podcast returns with a new episode on Monday - the show is available on all major podcast platforms.
On to the news.
VinFast’s 2024 So Far
I haven’t covered VinFast since January when Vingroup founder and chairman Phạm Nhật Vượng replaced Lê Thị Thu Thủy as CEO. There’s a lot to get to, but I’ll try and keep this brief.
Before going further, I strongly recommend this investigative feature on VinFast from Hunterbrook Media.
In January, Indonesian President Joko Widodo visited the carmaker’s factory in Hải Phòng and said he supported the company’s plans to build a factory in Indonesia. VF went on to announce right-hand drive EV models for that market and attended the Indonesia International Motor Show.
They then opened a showroom in Jakarta and announced pricing that is, inexplicably, cheaper than in Vietnam.
Over in India, VF broke ground on its planned factory in Tamil Nadu on February 25, but that isn’t going well: according to this damning article from The Hindu Businessline, VF executives didn’t understand the structure of an Indian government financial incentive they expected to receive.
The situation in North Carolina isn’t much better over nine months after the groundbreaking there: what little construction was happening stalled while state officials waited for a revised smaller design from VF.
The company quickly filed this revision after news broke that work was paused, though it isn’t clear when work will resume.
Nonetheless, executives recently reiterated that the North Carolina plant will open by the end of 2025.
The carmaker also aims to sell 100,000 EVs this year despite missing its 2023 goal of 50,000 by a wide margin in delivering about 35,000 cars (roughly 70% of which went to GSM, the electric taxi company owned by Vượng).
This is all raising considerable concern about the health of Vingroup more broadly, concern that spilled into public view during the corporation’s shareholder meetings last week.
Nguyễn Thu Hằng, CEO of Vinhomes, reportedly said in response to a question: "We do not fund other companies in the same ecosystem, especially VinFast."
Later in the same meeting, Vượng said “We are encouraging everyone to help build VinFast. Vingroup subsidiaries will also make contributions."
He also pledged to put another US$1 billion into the company and added "We will never let VinFast go."
Also on the financial side, Vingroup bondholders recently agreed to roll over half of US$625 million in exchangeable bonds that were due.
Meanwhile, the Chinese EV behemoth BYD will launch three models in Vietnam next month. Pricing hasn’t been announced yet, and some Vietnamese consumers may think twice before buying a Chinese car, but BYD has rapidly become a dominant force in other markets.
One final thing to watch: last week, a family of four in California died after their VinFast crashed into a tree and caught fire. The tragedy is under investigation and there is currently no evidence that the car malfunctioned, but this is a serious incident.
The Heat
I’ve covered the ongoing heatwave several times, and it just isn’t going away - even if Vietnam’s temperatures are slightly less dangerous than those in Thailand or the Philippines.
The heat index in HCMC as I write this is 44 C (111 F), and this has become the city’s longest heatwave in three decades. According to VnExpress, from January 1 to April 29, the actual temperature passed 35 C on 74 out of 120 days.
Neighboring provinces have experienced similar situations, and while areas like Nghệ An and Thanh Hóa have seen even higher temperatures over the last week (with heat indexes pushing 50 C), they had cooler breaks earlier in the year.
Last Friday, national electricity consumption set a new record of 993 million kilowatt-hours, and that’s without northern provinces reaching true summer yet.
A mass fish die-off in a reservoir in Đồng Nai has been partially blamed on the heat and lack of rainfall.
Unsurprisingly, many public beaches across the country were packed over the long holiday earlier this week.
Infrastructure Roundup
Speaking of the holiday, new expressways gave people more travel options while domestic airfares remained high.
On Sunday, the 78.5-kilometer-long Cam Lâm – Vĩnh Hảo Expressway opened with Prime Minister Phạm Minh Chính in attendance. It connects to existing highways that now - in theory - mean you can drive from HCMC to Nha Trang in about five hours, instead of eight hours on old Highway 1.
The 50.5-kilometer-long Diễn Châu - Bãi Vọt Expressway also opened, adding to a route that allows (again, in theory) people to drive from Hanoi to Vinh in about three hours.
That opening wasn’t entirely smooth, as local residents reportedly used tree branches to block the road since they hadn’t received compensation for damage caused by construction.
I also couldn’t help but notice that both highways have two narrow lanes in each direction with no shoulder or emergency lane, an issue that has caused numerous deadly crashes on other expressways.
Still, this is progress at a time when other infrastructure is struggling, and the government is over halfway toward its goal of completing the planned 2,064 km North-South Expressway from Lạng Sơn to Cà Mau.
Here in HCMC, metro projects are making progress by…getting rid of hundreds of trees. (What was that about the heat index?) A total of 185 will be removed to link bus routes to the Bến Thành – Suối Tiên Line, while another 400 will be axed for construction of the long-delayed Bến Thành - Tham Lương Line.
Finally, care to see the impressive progress (not sarcasm - I’m serious!) on Long Thành International Airport? Here you go.
Extra Links:
Living high and dry on Viet Nam’s parched mountains (Mekong Eye)
Two Vietnams: Chronicling a Father and Daughter’s Shared Love For the Same Country (Literary Hub)
Pricey coffee is here to stay as hoarding, heat hit Vietnam supply (Bloomberg)
Have a great weekend!