"Tesla Vietnam" VinFast shares up about 170 percent, market value over $100 billion

On Tuesday, August 22nd, Vietnamese electric vehicle manufacturer VinFast Auto ADR saw a surge of over 167%, reaching a new all-time high of $46.98 per share. Its market value surpassed that of Porsche, making it the third-largest publicly traded automotive stock globally, only behind Tesla and Toyota. Due to excessive volatility, VinFast experienced its first temporary trading halt during the day.

On August 15th, VinFast, the Vietnamese electric vehicle manufacturer, completed its merger with a special purpose acquisition company (SPAC) called Black Spade Acquisition and began trading on the Nasdaq. On its first day of trading, the stock price soared, reaching a peak of $38.78 per share and closing at $37.06 per share, a staggering increase of 254.64%.

Established in 2017, VinFast is a subsidiary of Vingroup, one of Vietnam's largest publicly traded companies, owned by Vietnam's richest man, Mr. Pham Nhat Vuong. Vingroup operates in various sectors, including industry, real estate, and technology, with its group revenue accounting for 2.2% of Vietnam's GDP in 2022. VinFast was founded with the hope of developing Vietnam's national automobile industry, and Mr. Vuong has set Tesla as the benchmark for the company.

Regulatory filings show that Mr. Vuong controls approximately 99% of the company's shares, some of which are held by his wife and Vingroup JSC.

VinFast is a low-float company with a limited number of tradable shares, which means its stock price is prone to significant fluctuations.

To date, VinFast has exported around 2,100 electric vehicles to the United States and nearly 800 to Canada.

According to documents filed with the U.S. Securities and Exchange Commission in June, the deal with Black Spade valued VinFast at approximately $23 billion, making it the largest Vietnamese company to go public in the U.S. market.

Madame Thuy, CEO of VinFast, stated:

Going public in the United States is an important milestone for us. This listing will open doors to the capital market for our future.

Regarding the overall price pressure faced by VinFast following a series of price reductions by Tesla and other electric vehicle competitors earlier this year, the company stated that its strategy is to "offer high-quality products at affordable prices and provide excellent after-sales service":

Our products have always been priced competitively compared to similar products. However, when consumers delve into our products, they will discover that we offer more features and technologies. So, I believe consumers are starting to recognize the value our products bring.

We strive to maintain competitiveness in profitability in every market. I believe that profitability will come together with an increase in sales volume. Currently, we will adhere to our strategy.

Currently, the starting price of VinFast's 5-seater VF 8 in the United States is $46,000, while the base model of Tesla's 5-seater Model Y starts at $47,740.

However, Tesla passenger cars in the United States are eligible for a $7,500 federal tax credit, while VinFast vehicles do not qualify for tax exemptions as they are not manufactured in the United States.

In order to compete with brands in the US market, VinFast announced last month that its electric vehicle manufacturing facility in North Carolina has officially broken ground after a delay.

The first phase of the factory has a total investment of up to $2 billion, covering an area of approximately 1,800 acres, divided into five main production areas, including bodywork, assembly, stamping, painting, and energy center. The factory will also have other functional facilities.

In the initial stage, the factory will focus on producing VinFast's VF 7, VF 8, and VF 9 electric vehicles, with an estimated annual production capacity of 150,000 vehicles. The supplier base for components and materials for the factory will mainly be concentrated in the United States, Vietnam, and some other countries. In addition, the expansion and updates of the factory will be determined in the next phase.