We have seen incredible success stories of brands going public on NASDAQ. The latest one to emerge from the financial world is a Vietnamese electric vehicle manufacturer, Vinfast. On August 16, 2023, VinFast went public on the New York stock exchange in the USA, and by the end of the day, the EV brand was valued at $85 billion.
How did this happen? We will answer all your questions. But before that let us understand what VinFast is and how they came to exist in the realm of automobiles.
VinFast History
VinFast, a subsidiary of Vingroup in Vietnam, was founded in 2017 with an ambitious plan to enter the automotive industry. Within a year, the company showcased its sedan and SUV models powered by an IC engine at the Paris Motor Show. Production began in 2019, encompassing cars and electric scooters, and the company aimed to export vehicles globally.
Fast-forward to 2021, the company decides to introduce an “affordable EV” called the VF e34. The electric SUV was sold only in Vietnam and was priced at around AED 110,000. And in 2022, the brand went global by entering the American and European automobile markets.
Currently, the company retails the VF e34 compact electric SUV in the local market. In addition, the VF5 electric hatchback, the VF8 compact electric SUV and the VF9 electric MPV are manufactured for the global and local market. These cars offer a driving range of between 300km to 415km depending on the model.
According to a statement released by the company, the automaker has delivered close to 19,000 EVs including the VF e34, VF 5, VF 8, and VF 9 models as of June 30, 2023. It is also preparing for the upcoming launch of the VF 3, VF 6, and VF 7 models in the Vietnamese and global markets. To support the move, it has also established a company-owned retail and service network of over 122 VinFast stores worldwide.
VinFast Production Plant
All cars sold globally by VinFast are currently produced at their manufacturing facility in Vietnam. The manufacturing capacity at the plant is estimated to produce 950,000 vehicles per year by 2026. Additionally, the EV maker is also building a manufacturing plant in North Carolina, USA.
The new plant will produce electric cars and buses and production is expected to begin in July 2024. In the first phase, the plant is expected to have a production capacity of 150,000 vehicles per year.
VinFast Electric Car Response
In 2022, VinFast decided to phase out the ICE engine from the brand’s portfolio. In the same year, the EV maker decided to go global and land in the USA with two cars — VF8 electric SUV and VF9 electric MPV.
Initially, VinFast started accepting orders and set up a few showrooms in California. The first batch of 999 VF8 electric cars from VinFast hit US soil. Officials at VinFast stated that the initial batch of cars was majorly for marketing purposes. Yet, they were delivered to customers and given to media publications for review. And, oh boy! The response wasn’t exactly what Vinfast was hoping for.
The VF8 and the VF9 got a critical negative response from most media houses reviewing the electric cars. They felt VinFast electric cars need improvement in fit and finish along with refinement in the performance of the electric powertrain and several Advanced Driver Assist features. In response to this VinFast announced a recall earlier this year to fix software-related issues.
Adding further to the company’s future, a few reports floating on the internet also suggest that VinFast is going through a major cash burn due to low-volume production. However, VinFast is working on raising capital and the recent valuation should help them achieve it.
VinFast Valuation
The brand received a valuation of $85 billion on its first day. This brings VinFast behind Tesla valued at over $740 billion and BYD valued at over $95 billion. Why was it valued at $85 billion at NASDAQ? Did it beat Ford and VW at their current valuation to become one of the top 5 automobile brands in the world?
For starters, the automaker went live on NASDAQ merging with a special-purpose acquisition company, the Black Spade Acquisition. This meant that there were only 1.3 million shares on the market, which accounts for 1% of the total shares for VinFast. The other 99% is held by the VinFast Group Chairman and Founder Pham Nhat Vuong. Additionally, people’s urge to jump on the bandwagon of new EV automakers that could become the next Tesla is at an all-time high.
All of this resulted in the most insane valuation for an EV automaker in 2023 costing $37.09 per share. However, as of August 18, 2023, the price of shares dropped by around 40% compared to the first day. Due to the low volume, share prices will continue to be volatile.
While the company is riding on a wave of success in the stock market, we hope that the surfing continues. VinFast needs to address issues revolving around existing models, before introducing new ones in the market. And also production volume needs to be ramped up so that the cost of each vehicle comes down.
Currently, the VF8 and VF9 retail at around AED 172,000 and AED 304,000, respectively, which to be honest is not that affordable. There are no signs of VinFast’s launch in the UAE. However, keep an eye out on the new cars section at DubiCars. It might just turn up soon.
Looking to buy an electric car? Here is a list of used electric cars for sale in the UAE and new electric cars for sale in the UAE.
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