EV maker VinFast (VFS) shines in US market debut, but is it worth more than Ford, GM?

Vietnamese EV maker VinFast celebrated its listing on the Nasdaq exchange under the ticker “VFS” on Tuesday. During its market debut, VinFast’s market cap easily surpassed Ford and GM, ending the day worth almost as much as both combined.

VinFast stock soars during US market debut

Shortly after its business merger with special purpose acquisition company (SPAC) Black Spade Acquisition Co (BSAQ) was approved by shareholders last week, VinFast announced Monday it had completed the combination.

VinFast shares began trading this morning at around $22, more than double the $10 set stock price agreed upon with BSAQ at a value of $23 billion.

Well, investors were quick to pile in, sending VinFast stock shares over $34 a share shortly after noon. Although share prices slipped during afternoon trading hours, VinFast rallied into close, ending the day at $37 per share, up 270% from its planned IPO price.

At $37 a share, VinFast’s market value would be over $85 billion, significantly higher than that of Ford ($48 billion) and General Motors ($46 billion). Is VinFast worth more than nearly both Ford and GM combined?

Worth more than Ford and GM?

Since shipping its first batch of VF 8 electric SUVs to the US in November, the EV maker has sent nearly 3,000 models overseas. However, progress has been slow.

According to recent estimates from Kelley Blue Book, VinFast has sold 850 EVs in the US so far this year (11,300 globally). Of those, 740 of the sales occurred in the second quarter.

The EV maker has dealt with software issues that delayed its US rollout until March. More recently, VinFast broke ground on its first US electric vehicle production facility in North Carolina.

VinFast says it will invest up to $2 billion during Phase 1, with an area spanning roughly 1,800 acres. The plant will be divided into five main production areas: body shop, general assembly, press shop, paint shop, and energy center.

During the initial phase, the EV maker will focus on building VinFast VF 7, VF 8, and VF 9 electric models with over 150,000 annual production capacity once fully operational. Production is expected to begin in 2025.

VinFast generated $83.5 million in revenue in the first three months of the year, but operating losses reached -$472.1 million, resulting in a net loss of $598.3 million. The EV maker ended the quarter with $158.5 million in cash and equivalents.

The company’s chief financial officer, David Mansfield, told Reuters, “We have a number of strategic investors and institutional investors lined up. We expect to formulate some kind of capital raising over the next 18 months, for sure.”

Mansfield added, “We don’t need more equity capital, but if an opportunity is presented, we’ll obviously take advantage of that while we can.”

Meanwhile, Ford sold 14,843 EVs in the second quarter, down 2.7% from the first quarter. The primary reason for the dip is due to downtime at its Mexico plant, where the Mustang Mach-E is built.

Ford’s Model e EV unit generated $1.8 billion in revenue in the second quarter while operating losses reached $1.08 billion (keep in mind, Ford also has hybrid/ICE sales in addition to its commercial and software business). The automaker is pushing back its 600,000 EV production goal until 2024 after planning to hit it by the end of the year.

On the other hand, General Motors sold 15,652 EVs in the US in Q2, down 21% from the first three months of the year. Despite the Chevy Bolt EV and EUV accounting for over 93% of GM’s EV sales through the first half of the year, the automaker is discontinuing the current model to make room for its Ultium-based lineup (which will include a next-gen Bolt EV, don’t worry).

Electrek’s Take

I wouldn’t get too excited quite yet. We’ve seen plenty of startups (not just EV companies) soar on the first days or weeks of trading, only to fall significantly after that.

For example, Rivian’s market cap skyrocketed to over $150 billion within a week of its IPO in November 2021. The EV startup has watched its value dwindle over the years, settling around $20 billion currently.

VinFast is an exciting EV company with a potentially promising future, don’t get me wrong, but do I think it should be worth more than Ford, GM, Lucid, or Rivian? At this point, not necessarily. The market had a surprisingly positive response to VinFast’s market debut. We’ll keep you updated with the latest.