VinFast, Vietnam's National Car, Surpasses Valuation of Ford and BMW

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VinFast, Vietnam's National Car, Surpasses Valuation of Ford and BMW

A car manufacturer established by the wealthiest individual in Vietnam has garnered a higher valuation from investors compared to Ford and BMW, despite having produced only 20,000 electric vehicles since its inception and facing harsh initial critiques.

VinFast, which incurred a loss of $2.1 billion in 2022, achieved a valuation of $85 billion at the conclusion of trading on Tuesday after becoming listed on New York's Nasdaq stock exchange through a merger with a cash shell corporation.

Numerous enterprises have achieved substantial valuations by capitalizing on the potential for rapid growth in electric vehicle sales, inspired by the triumphs of Tesla, the company overseen by Elon Musk.

Although VinFast has never turned a profit, its stock price surged by more than threefold on its debut trading day on Nasdaq, endowing the company with a theoretical valuation surpassing that of prominent and well-established automakers such as BMW at $69 billion, Ford at $48 billion, and General Motors at $46 billion.

The Vietnamese-founded automaker forms part of Vingroup, a conglomerate with investments in retail, real estate, and healthcare. It belongs to the billionaire Pham Nhat Vuong, who retains 99% ownership of VinFast shares. Companies with a limited quantity of shares accessible on stock markets can be prone to significant price fluctuations.

Vuong created Vingroup in Ukraine in 1993, initially selling instant noodles. Subsequently, he employed the proceeds from this endeavor to construct residences, Vinpearl-branded resorts, and Vincom shopping centers in Vietnam. Prior to VinFast's public listing, his net worth stood at $5.7 billion according to the Bloomberg billionaires index.

Up until the end of June, Vuong and other investors had injected $9.3 billion in capital, as outlined in a company presentation, to facilitate VinFast's rapid expansion of production and the establishment of a new factory in the United States.

Founded in 2017, the company initially produced four internal combustion engine vehicles and plans to discontinue the production of these cars next year. Electric vehicle (EV) production commenced in 2021.

On its first trading day, shares in VinFast skyrocketed by 255%. However, they experienced a subsequent decline of approximately 25% on the following day.

The public listing was executed through a merger with Black Spade Acquisition, a special purpose acquisition company (SPAC). Several electric car startups, including Lordstown Motors and Lucid, have previously attained substantial valuations after SPAC mergers during the boom of 2020 and 2021, only to encounter challenges in achieving profitable car production.

While VinFast has succeeded in delivering a considerable number of electric cars to customers, it still appears to have a considerable journey ahead before it can rival the established leaders of the automotive industry.

The company has introduced four new electric models at a pace that even seasoned car manufacturers would find difficult to match. However, reviewers in the US have suggested that its $56,000 VF8 model requires substantial improvement. Motor Trend magazine asserted that the car was "far from being ready for public consumption." The reviewer noted, "As it currently stands, I would feel uneasy handing over the keys of this vehicle to a customer."

Two other reviewers reported experiencing motion sickness during their test drives, attributing it to poor handling.

Road & Track magazine stated, "The car is simply incomplete, lacking competitiveness, and, in all honesty, among the poorest modern cars I've ever driven."

In a statement commemorating the public listing, Le Thi Thu Thuy, the CEO of the carmaker, remarked, "VinFast has accelerated the global electric vehicle revolution by making intelligent, secure, and environmentally conscious EVs accessible to all."

Akhyari Hananto

I began my career in the banking industry in 1997, and stayed approx 6 years in it. This industry boost his knowledge about the economic condition in Indonesia, both macro and micro, and how to More understand it. My banking career continued in Yogyakarta when I joined in a program funded by the Asian Development Bank (ADB),as the coordinator for a program aimed to help improve the quality of learning and teaching process in private universities in Yogyakarta. When the earthquake stroke Yogyakarta, I chose to join an international NGO working in the area of ?disaster response and management, which allows me to help rebuild the city, as well as other disaster-stricken area in Indonesia. I went on to become the coordinator for emergency response in the Asia Pacific region. Then I was assigned for 1 year in Cambodia, as a country coordinator mostly to deliver developmental programs (water and sanitation, education, livelihood). In 2009, he continued his career as a protocol and HR officer at the U.S. Consulate General in Surabaya, and two years later I joined the Political and Economic Section until now, where i have to deal with extensive range of people and government officials, as well as private and government institution troughout eastern Indonesia. I am the founder and Editor-in-Chief in Good News From Indonesia (GNFI), a growing and influential social media movement, and was selected as one of The Most Influential Netizen 2011 by The Marketeers magazine. I also wrote a book on "Fundamentals of Disaster Management in 2007"?, "Good News From Indonesia : Beragam Prestasi Anak Bangsa di dunia"? which was luanched in August 2013, and "Indonesia Bersyukur"? which is launched in Sept 2013. In 2014, 3 books were released in which i was one of the writer; "Indonesia Pelangi Dunia"?, "Indonesia The Untold Stories"? and "Growing! Meretas Jalan Kejayaan" I give lectures to students in lectures nationwide, sharing on full range of issues, from economy, to diplomacy Less
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