This EV Carmaker Just Had a Huge Day

A Vietnamese carmaker debuted on the Nasdaq on Tuesday and was suddenly worth more than legacy brands including Ford, General Motors, Mercedes-Benz, and Volkswagen. VinFast, one of the biggest automakers in Vietnam, began offering gas-powered vehicles in 2018, per Quartz. It launched electric vehicles in 2021, but only began selling them abroad late last year. Nearly 3,000 VinFast vehicles have reached North America since then, though "initial sales have been slow," per Reuters. The company—99% owned by Vietnam's richest man, Pham Nhat Vuong, through his flagship company VinGroup and affiliates—debuted on the Nasdaq on Tuesday after partnering with special purpose acquisition company, Black Spade Acquisition Co., which valued the company at $23 billion.

The initial share price was $10. But shares debuted at $22 and climbed to $37 by market close, for a 270% gain on the first day of trading, per CNN. That pushed VinFast's market cap above $85 billion, which is "more than all US EV startups combined," and more than Mercedes-Benz's $80 billion, Volkswagen and BMW's $70 billion, Ford's $48 billion, and GM's $46 billion, reports Barron's. The result also added some $39 billion to Vuong's net worth, per the South China Morning Post. It was based on slim trading, with about $185 million worth of the company's shares exchanged, per Reuters. But it was still remarkable for a company that has yet to post a profit. VinFast posted a $2.1 billion net loss in 2022, followed by a loss of $598 million in the first quarter.

It helps to have a wealthy backer. Vuong, VinGroup, and affiliates have invested $9.3 billion in the automaker, per Reuters. In April, Vuong pledged $2.5 billion to strengthen the company, including $1 billion from his personal fortune. Plus "we have a number of strategic investors and institutional investors lined up," VinFast CFO David Mansfield tells Reuters. "We expect to formulate some kind of capital raising over the next 18 months, for sure." In the meantime, the automaker is constructing a $4 billion plant in North Carolina, with production to begin in 2025, and revising its strategy of bringing its vehicles, with prices comparable to Tesla, directly to consumers. It's now in talks to open dealer showrooms in overseas markets, VinFast CEO Le Thi Thu Thuy tells Reuters. (More electric vehicles stories.)