Remarkable Wall Street Debut
Vinfast shares surged by 21% on a Monday, continuing a rally from the previous week that increased its market value to $160 billion. This surge followed the company's impressive debut on Wall Street earlier this month, which propelled its valuation to rank as the third-most valuable automaker globally, only behind Tesla and Toyota. However, the limited number of publicly available shares has caused the stock to be volatile, with shares fluctuating more than 14% in 11 of the past 12 sessions.
Significant Increase in Market Capitalization
The stock was poised to add almost $33.6 billion to its market capitalization, based on a share price of $83.33. Notably, VinFast's shares were among the most actively monitored on Stocktwits, a website popular with retail investors. Almost entirely controlled by Pham Nhat Vuong, the richest man in Vietnam and founder of parent conglomerate Vingroup, Vinfast has a stake of about 99.7%, according to a filing.
Market Enthusiasm Despite Challenges
Despite the enthusiasm in the market, Vinfast faces significant challenges before it can compete meaningfully with Tesla and other legacy automakers that are investing billions to capture a share of the EV market. Only 137 Vinfast EVs were registered in the United States through June, according to S&P Global Mobility. Additionally, the company is entering the U.S. and European markets at a time when EV demand is slowing, and Tesla has initiated a price war to maintain its dominance.
VinFast's Sales Strategy
Vinfast aims to sell up to 50,000 electric vehicles this year, compared to Tesla's projection to deliver 1.8 million cars. To boost sales, Vinfast is deviating from the direct-to-consumer approach used by Tesla and is turning to dealers. Furthermore, the company is constructing a $4 billion factory in North Carolina.
