VinFast, a Vietnamese manufacturer of EVs, made an extraordinary debut on the Nasdaq stock market on August 15. Shares of the automaker, which went public through a special purpose acquisition merger with firm Black Spade Acquisition, climbed 68% to finish at $37.06 and were valued at $86 billion, considerably exceeding those of Ford, GM, and Stellantis.
But on August 16, the company was surprised when it maintained a market cap that put it far ahead of other well-known manufacturers despite its stock price falling 18.75% and finishing at $30.11.
The valuation raises questions for the new EV upstart that only shipped 11,300 vehicles in the first half of 2023. Furthermore, the company’s fundamentals reveal expensive ambitions surpassing its revenue.
VinFast has a strategy to enter the U.S. market on the retail and manufacturing fronts. This plan calls for constructing a $2 billion EV facility in North Carolina and opening showrooms there and in other states.
For VinFast, share price volatility is likely to persist. However, the actual test will come in the following years as VinFast tries to scale manufacturing and convince Americans to buy its line-up of EVs. Given that VinFast’s VF8 EV has received harsh criticism for everything, from riding quality to outright malfunctioning, that could be a difficult road.
“In response to how VinFast plans to compete with the big players in a competitive market like the U.S.,” VinFast CEO Lê Th Thu Thy remarked, “there is enough market share for each player.”