Vietnam EV maker VinFast valued at more than Ford of GM

A Vietnamese electric vehicle (EV) maker, VinFast, has seen its stock market valuation soar above established carmakers Ford and General Motors (GM) on its first day of trading.

The firm has yet to make a profit, however its shares closed above $37 (€33.85) each in their New York’s debut.

As a result, VinFast’s stock market valuation came in at $85bn – a significant leap from Ford’s $48bn and GM’s $46bn.

VinFast’s founder and chairman, and Vietnam’s richest man, Pham Nhat Vuong, saw his wealth swell by around $39bn thanks to the listing.

International media cite regulatory filings which show that he controls 99 per cent of the firm’s outstanding shares, in large part through Vingroup JSC – Vietnam’s largest conglomerate.

The set up therefore limits the number of shares available for other investors to trade, which can result in larger price swings.

Indeed, trading in VinFast was relatively scant on Tuesday, with around $185m worth of its shares changing hands.

“Investors are continuing to believe that the future is in electric and that a low-cost East Asian country will emerge as a competitor in the US,” said Bill Russo, Founder and CEO of Shanghai-based Automobility.

“The markets believe that given geopolitics that Vietnam, not China, will be that country.”

VinFast did not opt for a conventional share sale, and instead went public through a shell company, otherwise known as a special purpose acquisition company (Spac).

It is a method often used by start-ups to accelerate the process of taking a private company public. In other words – it provides a mechanism by which a company that is not on the stock exchange is merged with one that is.

Over the past years, several EV makers have opted to go public using Spacs, most notable Lordstown Motors. In several cases, firms have lost more than 90 per cent of their stock market value since their mergers. Commentators however believe that VinFast is in a unique position since it is primarily backed by Vingroup, giving them access to funding from a growing business.