Vietnamese automaker Vinfast, known for its electric vehicles, recently garnered worldwide attention with its dramatic changes in stock value. On August 28, Vinfast stock surged by 21%, making the company the third most valuable automaker globally, right behind Tesla and Toyota, as reported by Reuters.
Despite joining the league of the world’s most valuable automakers, Vinfast’s share prices have been anything but stable. Mostly controlled by Vietnam’s wealthiest man, Pham Nhat Vuong, who holds about 99.7% stake in the company, the limited availability of Vinfast’s shares to the public has led to high volatility in its share price.
Further complicating matters, just one day after reaching a market value of $160 billion, Vinfast shed $90 billion in market value. This drastic plunge is not an isolated event for this automaker; since the company’s Wall Street debut in August, Vinfast’s share price has repeatedly surged and plummeted.
This rapid fluctuation in the company’s shares can also be linked to market speculation. Vinfast’s high market value is partially based on the expectation that electric vehicles (EVs) will become more prevalent in the near future, despite the fact that the company’s current production numbers do not warrant a $160 billion valuation – Vinfast expects to sell around 50,000 cars this year compared to Tesla’s 1.8 million.
Moreover, competition in the market has also been relentless. Despite substantial investments in their EV product lines, traditional automakers like Ford and General Motors have been unable to compete with industry titan Tesla. The EV pioneer has continued to put pressure on competitors by slashing prices throughout 2023, leading to significant financial losses for these legacy companies. For instance, after losing $2.1 billion on EVs last year, Ford anticipates doubling this loss to a staggering total of $4.5 billion for 2023.
Yet, in spite of these challenges, there is still optimism that Vinfast can break into the electric vehicle market. The company is currently constructing a $4 billion factory in North Carolina to hasten its entry into the North American market, indicating the influence and presence that Vinfast seeks to establish in the global EV landscape.
While we may not see a Vinfast car in North America in the immediate future, the company’s stock prices remain a topic of interest for many. The interesting fluctuations in stock value and the company’s ambitious plans to establish a footprint in North America are reasons enough to continue keeping a watchful eye on Vinfast.