BANGKOK, THAILAND – 2023/05/18: VinFast showcases its vehicles at the Future Energy Asia Exhibition 2023 held at the Queen Sirikit National Convention Center.
Nathalie Jamois | Lightrocket | Getty Images
VinFast’s shares experienced a remarkable 270% surge following its debut on U.S. exchanges, surpassing the market value of renowned automakers such as Ford, GM, BMW, and Volkswagen.
On Tuesday, the Vietnamese electric vehicle manufacturer made its debut on Nasdaq after completing its merger with Black Spade Acquisition, a U.S.-listed special purpose acquisition company (SPAC) that facilitates the acquisition of existing operating companies through an initial public offering.
VinFast’s shares closed at $37.06, marking an impressive 270% increase compared to Black Spade Acquisition’s IPO price of $10. However, shares experienced a 10% decline before the market opened on Wednesday.
After its market debut, VinFast’s total market value reached $85 billion, a significant increase from its previous valuation of approximately $23 billion during the SPAC merger.
In contrast, BMW and Volkswagen hold market values around $69 billion, with Ford at $48 billion and GM at $46 billion.
Tesla remains the world’s largest automaker with a market capitalization of $739 billion, while Chinese rival BYD holds the fourth-place position with a valuation of $93 billion.
As the automotive unit of Vietnamese conglomerate Vingroup, VinFast was established in 2017.
SPAC is ‘just a way for us to get listed’
Analysts have previously highlighted the high volatility of SPAC shares due to their speculative nature. Macro-economic factors have led many sponsors to abandon proposed deals even before the SPACs were listed.
VinFast’s CEO, Lê Thị Thu Thủy, stated in a CNBC interview that the company had initially planned to pursue a traditional IPO but decided to separate the listing from the fundraising due to challenging market conditions. With financial backing from its parent company, VinFast proceeded with a SPAC listing as a means to enter the U.S. market. The company’s focus was on getting listed rather than considering the reputation of SPACs.
VinFast received a $2.5 billion boost in April from Vingroup and Vingroup’s chairman, Pham Nhat Vuong, to support its global expansion efforts.
Despite the unfavorable market conditions for its SPAC listing, VinFast delivered its vehicles to its first U.S. customers in March after resolving a software issue that caused delays. In addition, the company is constructing a factory in North Carolina to compete with Tesla, BYD, and other traditional automakers in the U.S. market. The facility is expected to have an annual production capacity of up to 150,000 vehicles in its first phase, with operations set to begin in 2025, a year later than the initial target.
When asked about competition in the U.S. market, Lê emphasized that there is enough market share for all players due to the global shift from internal combustion engines to electric vehicles.
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