VinFast: Vietnam's Electric Vehicle Manufacturer Surpasses Ford and GM in Market Valuation

Vietnamese electric vehicle (EV) manufacturer VinFast has achieved a remarkable feat by surpassing the market valuations of Ford and General Motors (GM) on its first day of trading on the New York Stock Exchange. Despite not having achieved profitability yet, VinFast's stock closed above $37 per share, giving it a valuation of $85 billion, much higher than Ford's $48 billion and GM's $46 billion. This development highlights the intense competition among established auto giants and emerging manufacturers in the booming EV market. VinFast's founder, Pham Nhat Vuong, who already held the title of Vietnam's wealthiest individual, saw a $39 billion increase in his net worth due to the successful listing. The company's unconventional use of a special purpose acquisition company (SPAC) for going public distinguishes it from other EV startups that have taken this route. While VinFast faces competition from leaders like Tesla and BYD, its strong foundation and backing from Vingroup position it well for success in the EV sector.

VinFast: Vietnam's Electric Vehicle Manufacturer Surpasses Ford and GM in Market Valuation

VinFast, the Vietnamese electric vehicle (EV) producer, achieved a remarkable milestone on its debut day in the stock market by surpassing the valuations of Ford and General Motors (GM).

Closing above $37 (£29) per share during its debut on the New York Stock Exchange, VinFast's valuation soared to $85 billion, which significantly exceeded Ford's $48 billion and GM's $46 billion, despite not having achieved profitability yet.

This development reflects the intense competition among established automotive giants and emerging manufacturers as they vie for a share of the rapidly expanding EV market.

The successful listing added approximately $39 billion to the net worth of VinFast's chairman and founder, Pham Nhat Vuong, who was already the wealthiest individual in Vietnam.

As per regulatory filings, Vuong controls a staggering 99% of the outstanding shares of VinFast, primarily through Vietnam's largest conglomerate, Vingroup JSC. This concentrated ownership can lead to substantial price fluctuations due to limited shares available for trading.

Trading activity in VinFast on Tuesday was relatively subdued, with shares worth around $185 million changing hands.

Bill Russo, the Founder and CEO of Shanghai-based Automobility, noted that investors continue to place their faith in the electric vehicle future and anticipate the emergence of a competitive low-cost East Asian nation in the US market. Russo also highlighted that the market believes Vietnam, rather than China, might fulfill that role.

VinFast adopted an unconventional approach to going public, utilizing a special purpose acquisition company (SPAC), which is a shell company designed to expedite the process of taking a private entity public. This strategy has been employed by several EV manufacturers in recent years.

However, other EV companies that used SPACs, like Lordstown Motors and Faraday Future, experienced significant drops in their stock market value post-merger.

Russo suggested that VinFast might distinguish itself due to its substantial backing from Vingroup, a business with a proven history of growth that provides access to funding. He emphasized that many EV startups falter due to a lack of profitability and eventual depletion of external funding.

While VinFast benefits from a strong foundation, it faces fierce competition from established market leaders such as Tesla, led by Elon Musk, and BYD, backed by veteran investor Warren Buffett. These leaders have resorted to price reductions to bolster sales.

In the first half of the year, VinFast delivered 11,300 EVs, a noteworthy accomplishment, yet considerably behind Tesla's delivery of over 889,000 vehicles during the same period.

Dan Ives of Wedbush Securities acknowledged Tesla's continued dominance in the EV sector but anticipated multiple winners in the market. He indicated that VinFast has established a solid groundwork for EV success.