© Reuters. FILE PHOTO: People walk next to a VinFast logo on a screen during the press day at the Los Angeles Auto Show in Los Angeles, California, U.S. November 17, 2022. REUTERS/Mike Blake/File Photo
By Phuong Nguyen, Francesco Guarascio and Anshuman Daga
HANOI/SINGAPORE (Reuters) -Electric vehicle maker VinFast’s shares soared on their Nasdaq debut on Tuesday following the Vietnamese startup’s $23-billion backdoor listing as the company said it was likely to raise money from global investors within 18 months.
The stock opened at $22, more than double the $10 per share agreed with VinFast’s SPAC partner Black Spade Acquisition that had valued VinFast at $23 billion.
The merger with the special purpose acquisition company (SPAC) gave Vinfast a listing in a market where its founder, Vietnam’s richest man, hopes to take on industry leader Tesla (NASDAQ:) with a $4-billion factory under construction and a new approach to sales to bring in dealers.
“We have a number of strategic investors and institutional investors lined up. We expect to formulate some kind of capital raising over the next 18 months for sure,” VinFast Chief Financial Officer David Mansfield told Reuters.
“We don’t need more equity capital but if an opportunity is presented, we’ll obviously take advantage of that while we can.”
At one point on Tuesday morning, VinFast shares traded over $34, which would have valued the electric vehicle (EV) maker, which has not posted a profit, at almost $79 billion, more than Ford’s market capitalization at $48 billion and General Motors (NYSE:) at $47 billion.
VinFast’s founder, Vietnam’s richest man Pham Nhat Vuong, is the beneficial owner of 99% of the 2.3 billion ordinary shares of the EV maker after the merger through his flagship company and affiliates.
The volume of trading in VinFast was negligible, with only 0.16% of shares changing hands in the first three hours of trading.
“Most of our shareholders will be locked up for six months to a year, so the free float is quite small at the beginning,” said VinFast CEO Le Thi Thu Thuy.
VinFast has shipped nearly 3,000 vehicles to North America since late last year but initial sales have been slow. S&P Global (NYSE:) Mobility says that only 137 Vinfast EVs had been registered in the United States through June.
Thuy said the company was changing its distribution model, which had been based on Tesla’s direct-to-consumer approach, and expected to partner with dealers in overseas markets.
“We are switching to a hybrid model where we have our own showrooms, as well as talking to dealers to open dealer showrooms,” Thuy said in an interview with Reuters.
VinFast was formed as a unit of Vietnam’s largest conglomerate Vingroup. Vuong, Vingroup and affiliates had invested $9.3 billion in the EV maker, according to a June filing. Vuong pledged $2.5 billion in April to bolster the EV maker, including $1 billion from his personal fortune.
VinFast’s first-quarter revenue dropped 49% from the previous year, and it posted a net loss of $598 million. In 2022, the company posted a loss of $2.1 billion.
The company has started construction on a $4-billion plant in North Carolina.
VinFast is entering the American and European markets at a time when EV pricing is under pressure, led by market-leader Tesla and a range of EV makers in China.
VinFast’s VF8 starts at $46,000 in California compared with $47,740 for the Tesla Model Y before accounting for a $7,500 federal tax credit on the Tesla.
Thuy said VinFast was moving toward “cost reduction in the future.” She added: “We aren’t passive in getting there with our cost optimization.”
Thuy said VinFast expected to bring its larger VF9 EV to the U.S. market toward the end of the year and was in the process of getting its cars certified by Europe’s safety regulator.
