EV Start-Up VinFast Becomes Third Most Valuable Automaker

Surge in shares of Vietnamese electric vehicle start-up VinFast values company third in world after Tesla and Toyota

Vietnamese electric auto start-up VinFast has become the third-biggest car maker in the world by market capitalisation, following a rally that began last week.

After its latest share price surge the firm’s market capitalisation was behind only that of Tesla and Toyota – although it sold only 7,400 cars last year, all in Vietnam.

VinFast listed on the Nasdaq Global Select Market earlier this month via a merger with special purpose acquisition company (SPAC) Black Spade Acquisition Co., with shares listed at $10 (£8) and a valuation of $23bn.

Its shares were trading at eight times that amount by early this week.

Volatility

The company was founded in 2017 by billionaire Pham Nhat Vuong, head of parent company Vingroup, which operates in sectors including real estate development, technology and retail.

Vuong controls about 99 percent of VinFast through his own shares and those held by his wife and Vingroup.

The small number of shares available for public trading means that any movement at all is reflected in steep price changes.

Electric vehicle companies have proven popular with investors in recent years, led by Tesla, but have also been wracked by volatility, with Rivian and Lucid being two examples that are currently trading well below their IPO prices.

International expansion

VinFast is planning a rapid international expansion and expects to sell 40,000 to 50,000 electric vehicles worldwide this year.

For comparison, Tesla espects to sell 1.8 million electric vehicles  this year, up from 1.3 million in 2022, while Toyota sold 10.5 million cars last year and has a target of 1.5 million EVs by 2026.

The Vietnamese firm only had 137 vehicles registered in the US as of June, but broke ground on a $4bn plant in North Carolina last month and sells its cars through 13 showrooms in California.

It currently offers the VF8 electric SUV in the US and is planning a larger SUV in the country this year and two others next year, along with plans to enter the European market.