VinFast, a Vietnamese electric vehicle (EV) manufacturer, has raised eyebrows due to its sales distribution. Reports indicate that over half of VinFast’s electric vehicles sold this year, approximately 7,100 units out of 11,300, were purchased by Green and Smart Mobility (GSM), a Vietnamese taxi company. GSM is under the umbrella of Vingroup, the parent company of VinFast. This data was disclosed in VinFast’s filings to the US Securities and Exchange Commission in July and September.
VinFast made headlines when its stock price soared dramatically after its listing through a special purpose acquisition company (SPAC) in the previous month. Despite having sold only 24,000 vehicles in the entire previous year, at one point in September, the company’s market capitalization reached a staggering $200 billion. This valuation briefly placed VinFast among the world’s most valuable automakers, surpassing established giants like Volkswagen, Ford, and General Motors, despite the latter’s significantly larger sales volumes.
However, this meteoric rise in valuation didn’t last, as VinFast’s market capitalization plummeted by 80%, settling just below $40 billion. Even with this substantial drop, the company remains valued higher than some well-known automakers such as Hyundai, Nissan, or Renault. The majority of VinFast’s shares are controlled by its founder, billionaire Pham Nhat Vuong, making the available shares relatively scarce and susceptible to significant price fluctuations.
While VinFast had ambitious plans for international expansion, early reviews of its EVs by US car experts have been overwhelmingly negative, with reviewers calling them “simply not ready” and “abysmal.” Furthermore, the company faced issues with the shipment of its first batch of cars to the US in December, leading to substantial delays and recalls following a warning from the US National Highway Traffic Safety Administration regarding a software error that posed an increased crash risk.
Despite the challenging landscape, VinFast is committed to its expansion plans and aims to sell 50,000 vehicles by the end of the year. However, the significant proportion of sales to a related taxi company raises questions about the true market demand for VinFast’s EVs and the sustainability of its rapid ascent in the automotive industry.