2023-08-21 07:28:36
VinFast — Vietnam’s leading electric car maker — took the market by storm following debuting on the Nasdaq with an increase of more than 250%, which catapulted its valuation to $85 billion.
The debut took place last Tuesday and, for one day, the company was worth almost the same as GM and Volkswagen – combined. (The two automakers are worth regarding $47 billion each.)
The party, however, was short-lived.
In the last three trading sessions, the stock underwent a brutal correction, falling by half.
Today, the company is worth regarding $43 billion — still impressive value for a six-year-old company that sells fewer cars in a year than GM does in a week and has never come close to turning a profit.
VinFast listed on the Exchange through a merger with SPAC Black Spade, which valued the company at $23 billion. The automaker is part of the Vingroup conglomerate, controlled by businessman Pham Nhat Vuong and with business mainly in the technology and industry sectors.
The company is still coming out of diapers. It produced just 19,000 vehicles in the first half of this year. In the United States, where it entered recently, the company made only 2,100 imports; in Canada, only 800.
But VinFast’s plans are ambitious.
To compete with the big American brands, the company is building a $4 billion factory in North Carolina. The expectation is that this plant will start operating in 2025 with an annual production capacity of 150,000 electric cars.
VinFast CEO Lê Thị Thu Thủy told CNBC that with the North Carolina factory, “we expect to be able to significantly reduce costs and offer our products at a more affordable price point for American consumers.”
Today, VinFast cars are priced in line with Tesla, which already has a much better known and respected brand among Americans. VinFast’s five-seat VF-8 starts at $46,000, compared to $47,700 for Tesla’s Model Y.
Lê said he always prices his products competitively, “but when you look deep into our products, they’re packed with more features and more technology. So I think consumers will start to recognize the value we bring.”
Since it was founded, VinFast has received billions of dollars in investments from Vingroup and Vuong — who have always made it clear that their goal with VinFast is to compete on an equal footing with the big manufacturers in the sector, such as Tesla and BYD. on one filing June, the company said it had received US$ 9.3 billion in contributions in recent years.
In April alone, the company raised $2.5 billion in equity, including $1 billion that Vuong invested from his own wealth.
Peter Arbex
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