VinFast/Vietnam: founder is main beneficiary of EV company listing

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The richest man in Vietnam just got a lot richer. Pham Nhat Vuong, chair of VinFast Auto, has added billions of dollars to his net worth thanks to the success of the Vietnamese electric-vehicle maker’s New York listing. But the company’s $85bn market valuation may be short-lived.

VinFast shares rose 255 per cent after it joined markets through a merger with blank-cheque company Black Spade Acquisition. The rare Vietnamese listing is good publicity. VinFast wants to expand in the US market. Construction of its $4bn North Carolina factory began last month.

So far, however, rollout has been unimpressive. Just 137 VinFast EVs have been registered in the US as of June, according to S&P Global Mobility data. The company was forced to recall its electric SUVs in the US in May.

VinFast has yet to break even. It recorded a net loss of $598mn in the first quarter. Last year, it reported a $2.1bn loss. Cash from the listing will help to fund the Carolina factory.

Cutting prices to take market share from Tesla will therefore be tough. Prices for VinFast’s electric midsize crossover VF8 start at $46,000 in the US. Tesla’s Model Y costs $47,740 but qualifies for a $7,500 federal tax credit.

VinFast’s projected annual sales of up to 50,000 were already a stretch from last year’s 7,400 sales. But even if it can achieve this it will still be small compared with established carmakers. VinFast’s annual goal is about an average week’s worth of sales volume for General Motors.

The company’s share price jump should not be taken as proof of widespread investor confidence. Trading volumes were skimpy, worth about $185mn of its shares. Vuong controls 99 per cent of outstanding shares, mostly via parent company Vingroup.

Vingroup, Vietnam’s biggest conglomerate, has a wide portfolio of real estate, retail, technology and healthcare businesses. For VF8 fans, Vingroup offers a less volatile way to bet on VinFast’s global expansion.