VinFast: Vietnam EV maker valued at more than Ford or GM

Vietnamese electric vehicle (EV) maker VinFast’s stock market valuation has soared above Ford and General Motors (GM) on its first day of trading.

Shares in the firm, which has yet to make a profit, surged by 255% in their debut on New York’s Nasdaq.

That gave VinFast a stock market valuation of $85bn (£67bn), much higher than Ford’s $48bn and GM’s $46bn.

It comes as motor industry giants and newer manufacturers fight for a slice of the booming EV market.

The listing has added around $39bn to the net worth of Vinfast’s chairman Pham Nhat Vuong.

He founded the company in 2017 and was already Vietnam’s richest man.

“Investors are continuing to believe that the future is in electric and that a low-cost East Asian country will emerge as a competitor in the US,” said Bill Russo, Founder and CEO of Shanghai-based Automobility.

“The markets believe that given geopolitics that Vietnam, not China, will be that country.”

Instead of a conventional share sale, VinFast went public using a shell company, or special purpose acquisition company (Spac).

Spacs are often used by start-ups to speed up the often slow and expensive process of taking a private company public. In simple terms, it means merging a company that is not on a stock exchange with one that is.

Several EV makers – including Lordstown Motors and Faraday Future – have gone public using Spacs in the last three years.

However, both firms have lost more than 90% of their stock market value since their mergers.

Mr Russo said VinFast could be different because “they are primarily backed by Vingroup, which gives them access to funding from a business that has a proven track record of growth”.

“Most EV start-ups fail because they do not have profitable core and external funding eventually runs out as they burn capital far faster than they generate cash,” he said.

But VinFast also faces tough competition as major players fight for market domination.

Market leaders – including Elon Musk’s Tesla and BYD, which is backed by veteran investor Warren Buffett – have been cutting prices to boost sales.

In the first half of the year VinFast delivered 11,300 EVs, according to a company presentation. By comparison, Tesla delivered more than 889,000 vehicles in the same period.

In the first three months of the year, the firm’s revenue fell 49% from the previous year, and it posted a net loss of $598m. Last year, the company lost more than $2bn.

VinFast has started construction of a $4bn plant in the US state of North Carolina.