VinFast says most of its electric vehicles have been sold to a related party
Filings underscore limited demand for EVs from Vietnamese start-up that briefly had higher market cap than Ford
More than half the electric vehicles sold by Vietnamese start-up VinFast this year have been to a related party, underscoring how small the market demand is for models produced by a company whose valuation briefly eclipsed those of Ford and General Motors.
Of the 11,300 vehicles sold by VinFast in the first half of 2023, 7,100 were sold to Green and Smart Mobility (GSM), a Vietnamese taxi company controlled by the carmaker’s parent Vingroup.
The details of Nasdaq-listed VinFast’s sales were contained in filings to the US Securities and Exchange Commission in July and September.
VinFast made history with the rapid climb of its stock price following its listing through a special purpose acquisition company last month. Despite selling just 24,000 cars last year, its $200bn valuation at one point in September propelled it into the ranks of the world’s most valuable automakers — far surpassing rivals such as Volkswagen, Ford and General Motors, whose sales are in the millions.
The market capitalisation of the lossmaking Vietnamese company, which has monthly sales far behind those of other electric vehicle producers such as Tesla and China’s BYD, has since plunged 80 per cent to just below $40bn. That valuation still makes it worth more than Hyundai, Nissan or Renault.
More than 99 per cent of VinFast is controlled by its billionaire founder Pham Nhat Vuong, Vietnam’s richest man even before the listing. The small amount of shares available for trading has made it prone to wild swings.
VinFast said in its filing to the SEC published on Tuesday that a further portion of its revenue came from sales of goods and battery-related spare parts to VinES and from sales of e-buses to VinBus. Both enterprises are owned by Vingroup.
In March, a VinFast subsidiary entered into a 24-month agreement with GSM for the sale and delivery of up to 30,000 VinFast EV models. VinFast has said it expects to sell 50,000 vehicles this year.
VinFast has big international ambitions, but early reviews of the six-year-old company’s EVs by professional US car reviewers were scathing, calling them “simply not ready”, and “abysmal”.
Its first shipment of cars to the US in December was heavily delayed and it was forced to carry out a big recall after the US National Highway Traffic Safety Administration warned of a software error that could increase the risk of a crash.
It is not uncommon for shares in newly listed EV businesses to rise before falling back. Weeks after its 2021 initial public offering, Rivian, the lossmaking California-based electric truckmaker, was briefly worth more than Volkswagen.
The valuations achieved by new EV businesses have been a source of intense frustration to established carmakers, who consider themselves underrated by investors.
Renault chief executive Luca de Meo last week decried the “bullshit” valuations offered by US investors to EV start-ups.
“Do you think that VinFast can be worth more than BMW? Let’s be serious,” de Meo told the FT.
VinFast is continuing its overseas expansion despite the setbacks. Deliveries in Europe were expected to begin in the second half of 2023, it said.
The filings also indicate it plans to add a third plant in Indonesia to its operations in Vietnam and a factory it is building in North Carolina in the US. The company said it aimed to invest about $1.2bn in the Indonesian market in the long term, of which $200mn would be reserved for the plant.