Reuters — 2023-08-28
Automotive Industry
Shares of Vietnamese electric-vehicle maker Vinfast surged 21% on 28 August, extending a rally from last week that more than quadrupled its market value to $160 bn.
The company made a blowout debut on Wall Street this month and has quickly grown in valuation to become the third-most valuable automaker - only behind Tesla and Toyota.
But Vinfast's small amount of publicly available shares has made the stock prone to volatility, with shares jumping or slumping more than 14% in 11 of the past 12 sessions.
The stock was on track to add nearly $33.6 bn to its market capitalization, based on a share price of $83.33.
Vinfast's shares were among the most actively watched on Stocktwits, a popular website with retail investors.
Vinfast is almost entirely controlled by Pham Nhat Vuong, Vietnam's richest man and founder of parent conglomerate Vingroup, with a stake of about 99.7%, according to a filing.
Despite the market enthusiasm, Vinfast faces a long road before it can start competing meaningfully with Tesla and legacy automakers that are pouring billions of dollars to grab a share of the EV market.
Only 137 Vinfast EVs were registered in the United States through June, according to S&P Global Mobility.
The firm is also entering the U.S. and European markets at a time when EV demand is slowing and Tesla has waged a price war to defend its dominance.
Vinfast expects to sell as many as 50,000 electric vehicles this year, compared with Tesla's projection to deliver 1.8 m cars.
To drive sales, Vinfast is breaking away from the direct-to-consumer approach used by Tesla and turning to dealers. The company is also building a $4 bn factory in North Carolina.