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The value of a Vietnamese electric vehicle manufacturer has surpassed that of Volkswagen and Ford.

Vietnam’s prominent automotive company has garnered significant attention upon its debut on Wall Street, resulting in a market capitalization surpassing that of renowned industry leaders like Volkswagen and Ford.

VinFast, a manufacturer of electric vehicles, experienced a highly successful introduction in New York on Tuesday following its merger with Black Spade Acquisition Co., a special purpose acquisition company (SPAC).

The shares of the recently merged corporation experienced a significant surge of 270% in value on the Nasdaq exchange during their initial day of trading. The stock commenced trading at a value of $22, which exceeded the original price of $10 by more than twofold. Subsequently, it concluded the trading session at a price of $37 per share.

The spike in value resulted in VinFast’s market capitalization surpassing $85 billion. According to Refinitiv, Volkswagen (VLKAF) and Ford (F) each have a market capitalization of 63.9 billion euros ($69.7 billion), while this amount is greater than either of those two companies’ values.

The remarkable surge in value, however, was predicated on limited trading activity. According to a regulatory filing, the ownership of VinFast remains predominantly in the hands of Pham Nhat Vuong, the wealthiest individual in Vietnam, as he holds approximately 99% of the company’s shares through his various commercial companies, including Vingroup.

According to the Bloomberg Billionaires index, the shares of VinFast, of which Vuong is the chairman, experienced a significant surge on Tuesday, resulting in an approximate increase of $39 billion in his personal wealth. His current estimated net worth is approximately $44.3 billion.

Established in 2017, VinFast emerged as a subsidiary of Vingroup, a prominent business in Vietnam. The company manufactures electric sport utility vehicles (SUVs), scooters, and buses, which are distributed and marketed in both Vietnam and North America.

According to VinFast, its performance on Tuesday has positioned it as the Vietnamese firm with the highest market capitalization listed in the United States.

According to CEO Thuy Le, it is the aim of VinFast’s management that the company’s listing will serve as a catalyst, fostering increased prospects for Vietnamese companies to engage in the global market.

Cold US response

According to the prospectus, the company has thus far introduced four distinct electric car types and successfully distributed around 19,000 automobiles. In the first half of 2023, Volkswagen achieved a notable sales figure of 4.4 million vehicles, with a substantial portion of 321,000 units being electrified.

VinFast has achieved widespread recognition and popularity in Vietnam, with its automobiles emerging as top-selling products and benefiting from a comprehensive charging infrastructure that spans over 60 towns and provinces.

However, the Vietnamese newcomer has had limited success in the United States, where it commenced its delivery operations earlier this year.

VinFast has faced criticism regarding their electric SUV, the VF 8, following the evaluation conducted by American journalists, resulting in negative evaluations.

Numerous headlines have exhibited a notably straightforward tone, exemplified by one from the industry publication Road & Track, which characterises the car as “utterly unsatisfactory.” Another article published by MotorTrend is titled “Return to Sender.”

Alternative perspectives were expressed in additional evaluations. The author emphasised that this was the company’s inaugural endeavour in manufacturing a vehicle specifically tailored for the United States market. The power delivery from the electric motors of the SUV was commended by another individual.

VinFast has stated in a blog post that company has implemented software enhancements in response to input received from both vehicle owners and the automotive reviewing community.

VinFast has openly expressed its aspirations for worldwide expansion. In the month of July, the company initiated construction on a novel manufacturing facility located in North Carolina, with the intention of utilising it as a central hub for sales operations throughout the United States. According to the firm, it is projected that the facility will potentially achieve a maximum capacity of 150,000 automobiles annually.

The company has additionally hinted at a forthcoming expansion into Europe, informing shareholders of its intention to join the continent in the near future.

In her statement on Tuesday, Le indicated that the company intends to utilise the newly generated funds to facilitate its growth, emphasising that its listing provides opportunities to access the capital markets and significant avenues for future advancement.

VinFast has not yet achieved profitability. A financial loss of to $1.4 billion was reported for the period spanning nine months, ending in September of the previous year. According to a regulatory filing, the company also reported a debt of around $2.5 billion as of the end of September.

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