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VinFast Now Worth More Than Ford or GM Shows Market Caps Have Gone Crazy

Ask anyone why Tesla has the world's highest market cap among automakers, and nobody will offer you a sensible answer. That's because there isn't one: Tesla sells a fraction of what Volkswagen and Toyota can deliver every year, its profit numbers are hard to explain, and its autonomous vehicle promises have never borne fruit. Compare that to what VinFast just did in the stock market on August 15, and you'll have another example of the madness that took over the investors who want to find the new Tesla.
VinFast is now worth more than Ford or GM, which makes no sense at all 54 photos
Photo: VinFast
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If you are not familiar with VinFast, it is a Vietnamese startup that wants to sell battery electric vehicles (BEVs). Although they are designed by Pininfarina, the first reviews of these cars have been fairly negative. "Not ready for production" was the nicest remark coming out of them. Despite that, the company wants to have a factory in the US and to expand its lineup as soon as possible.

On August 14, VinFast became a public enterprise by merging with a Special Purpose Acquisition Company (SPAC) called Black Spade Acquisition Co. The $23-billion merger created a $65-billion BEV maker the following day – when share prices increased to $28.11, or almost 190% more than the prices of the SPAC's IPO. There is no explanation for the price increase, but some peculiarities of VinFast may help you understand it.

According to Bloomberg, the Vietnamese startup is a low-float company. That means the amount of shares left to trade is small. Pham Nhat Vuong has around 99% of the BEV maker. The VinGroup founder left only 1.3 million shares for investors to fight for, which may explain Tuesday's rally. Why the entrepreneur decided to make its BEV maker public and hold 99% of the stock is something only he can explain. Whatever the reason was, Vietnam's richest man is a lot richer with that strategy.

Le Thi Thu Thuy talked to autoevolution about the company's battery pack subscription program
Photo: VinFast
With share prices around the same value, VinFast's market cap is estimated at $65 billion. That beats not only Ford ($47.2 billion) and General Motors ($45.66 billion) but also Honda ($49.9 billion), Stellantis ($55.8 billion), and Ferrari ($57.3 billion). All that for a company that has just started delivering BEVs?

Lucid and Rivian faced similar situations. In November 2021, Lucid was worth $89.9 billion. It started delivering the Air in October, which theoretically explains the enthusiasm with its shares. Investors rushed to buy them until they realized that the company was not selling as many cars as it intended. To make matters worse, Lucid faced quality control issues that disappointed its customers despite the clever engineering solutions it introduced. Saudi Arabia increased its investments in the company to keep it in good shape, but Lucid is now worth $14.4 billion.

Also in November 2021, Rivian became the world's third most valuable car company. It was even more shocking than Lucid's and VinFast's valuations because it had not delivered a single vehicle to regular customers. That only happened around one month later. With its $140-billion valuation at the time, the BEV maker only lagged behind Tesla and Toyota. Like Lucid, it also faced issues with its electric pickup truck – the R1T – and a lot of praise from the people who drove the BEV. Production hiccups held it back, as well as the realization that its vehicles were too expensive for manufacturing numbers to impress investors. Rivian is now worth $19.8 billion.

Vinfast VF 9 and VF 8 at the 2022 New York Auto Show
Photo: VinFast
The surprising bit is having VinFast present such numbers when the hype around other BEV makers is not working anymore. Tesla is probably the only exception, which is ironic. Several investors lament not being early investors in Elon Musk's company because of how much its market cap increased. Warren Buffett isn't: he never wanted to put his money in Tesla. The world's most respected investor chose BYD instead. The deal is that Buffett was already rich. Most Tesla investors buy shares to get there or to increase their fortunes. As several investors, employees, and former employees succeeded in doing that precisely with Tesla stock, what these other BEV startups theoretically offer is a similar opportunity.

It may be too soon to say if any of these new companies will repeat Tesla's stock market success, but it may also be premature to determine how much that triumph will last. The increasing BEV inventories suggest most people who wanted to purchase an electric car and could afford them already did. Autocar recently wrote that wealthy customers prefer premium vehicles with internal combustion engines – even in China.

That makes a lot of sense. Affluent buyers do not want to wait for their vehicles to charge – time is money, remember? In China, they can afford the expensive license plates that everybody else avoids by purchasing a BEV. They are not concerned about gas prices either. What does Pham Nhat Vuong use to move around? I am sure it is not a VinFast, especially with the market cap the BEV maker currently has.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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