Vinfast, the Vietnamese electric-vehicle manufacturer, has been making waves in the automotive world recently. Their shares experienced a remarkable 30% surge in premarket trading on a Monday, extending a rally that had already seen their market value quadruple to a staggering $160 billion. This surge in value came on the heels of a spectacular Wall Street debut earlier in the month. In a short span, Vinfast has ascended to become the third-most valuable automaker globally, trailing only the industry giants Tesla and Toyota in market capitalization.
However, it’s important to note that the meteoric rise of Vinfast’s stock has also come with a fair share of volatility. With a relatively limited number of publicly available shares, the stock has exhibited fluctuations, with shares fluctuating more than 14% in 11 of the past 12 sessions. This one-day gain alone surpasses the individual valuations of prominent U.S. automakers such as Ford Motor and General Motors, underscoring the remarkable growth of Vinfast.
Vinfast owes much of its success to its majority owner, Pham Nhat Vuong, who is not only Vietnam’s wealthiest individual but also the founder of the conglomerate Vingroup. Vuong holds a substantial stake of about 99.7% in Vinfast, according to official filings.
Nevertheless, despite this surge in valuation and market enthusiasm, Vinfast faces a considerable uphill battle before it can pose a substantial challenge to Tesla and established legacy automakers. As of June, only 137 Vinfast electric vehicles were registered in the United States, according to S&P Global Mobility. This contrasts sharply with Tesla’s ambitious projection to deliver 1.8 million electric cars. Moreover, Vinfast is venturing into the highly competitive U.S. and European markets at a time when electric vehicle demand appears to be slowing down. To make matters even more challenging, Tesla has initiated a price war to protect its dominant position.
To boost its sales and market presence, Vinfast is diverging from Tesla’s direct-to-consumer model and turning to traditional dealerships. Additionally, the company is investing heavily in its expansion plans, including the construction of a $4 billion manufacturing facility in North Carolina. These strategic moves highlight Vinfast’s determination to establish a significant presence in the global electric vehicle market, but the road ahead remains rife with challenges in a fiercely competitive landscape dominated by industry giants.