EV startup from Vietnam, with barely any sales and horror reviews, listed via SPAC: It’s now worth more than Ford and GM

Christiaan Hetzner
Updated 4 min read
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It may come as a surprise that a loss-making automotive startup founded six years ago is now worth more than Ford and General Motors—but somehow Vietnamese conglomerate VinFast Auto Ltd. has managed it.

And it’s not just the much-maligned Detroit incumbents that are getting passed by the Hanoi-based newcomer.

The company, which to date has only sold approximately 19,000 electric vehicles and was mercilessly mocked by car reviewers, has equally left EV-only competitors in the dust.

That’s despite the fact luxury EV maker Lucid and Rivian boast longer histories, have more industry expertise, and also boast strategic backers such as Saudi Arabia and Amazon.

Trading under the “VFS” ticker symbol at its Nasdaq debut this week, shares in the carmaker swelled to a $65 billion market cap, briefly placing it ahead of Ferrari as the eighth most valuable carmaker in the world.

“Today’s successful listing not only supports VinFast’s commitment to sustainable mobility at a global scale, but also unlocks access to the capital markets and important avenues for future development,” said its CEO, Le Thi Thu Thuy, who is in the process of building a new $2 billion manufacturing plant in North Carolina.

That marked the biggest debut for a new EV startup since Rivian founder R.J. Scaringe took his company public in the biggest IPO of 2021.

By comparison, VinFast took the easier route to floating its shares on the growth-oriented Nasdaq stock exchange.

By combining with an already listed special purpose acquisition company called Black Spade, it avoided the conventional path of an initial public offering of shares that comes with arduous disclosure and transparency requirements.

In the process, the listing catapulted the fortune of its chairman, Pham Nhat Vuong, into the upper atmosphere according to estimates by Bloomberg.

Following the listing, the net worth of Vietnam’s richest man—and founder of a conglomerate that operates everything from real estate to hospitals and schools—soared from around $5 billion to more than $44 billion in one fell swoop.

Rough road ahead?

Nevertheless, investors should be cautious. A hallmark of the last bull market’s excesses was a flurry of immature companies going public via SPACs that often ended in a debacle for shareholders.

The figurehead of the movement, “SPAC King” Chamath Palihapitiya himself, warned companies must demonstrate their business model can be truly profitable. That might prove difficult for VinFast given the mixed reception its debut model, the VF 8, received at launch.

Numerous outlets published negative reviews, with MotorTrend calling for a “return to sender,” while Road & Track argued the company’s freshman effort at an EV for the U.S. mass market was both embarrassing and unacceptable.

“Over a 90-minute drive, the 5,600-lb SUV never stopped bobbing, swaying, and bucking, producing near-constant head-tossing motions,” the magazine’s test critic wrote. “Riding in the passenger seat, I became carsick for the first time in years.”

So far just 850 have been sold in the first half of this year, according to market researcher Cox Automotive.

Not the most encouraging news for a company that even now, following a 22% drop in its shares on Wednesday, is still worth more than any U.S. carmaker, save for Tesla.

This criticism hasn’t dissuaded Vuong, its chairman, or indeed his CEO, from achieving their broader aspirations—raising the stature of their native Vietnam on the world stage.

“It is our hope that VinFast’s listing will inspire and unleash greater opportunities for Vietnamese brands to participate in the global market,” said Thuy Le on Tuesday.

This story was originally featured on Fortune.com

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