Is VinFast Another Tesla? Or Rivian? Or Bricklin?

Investors are treating Vietnamese battery-electric-vehicle--maker VinFast like it’s the new Tesla. Is it?

The automaker went public on Aug. 15, and as of trading on Aug. 28, the street value of the company topped $200 billion, compared with $47 billion for Ford and $45 billion for General Motors. Is the future performance of VinFast really likely to be greater than, say, Ford’s fullsize truck business alone?

Then, reality set in. And by the end of the next day, shares plunged 48% and wiped out $90 billion of that street value. On August 29, shares retreated all the way to $41 a share, valuing the company at more than $90 billion, still twice that of Ford and GM. And the next day, the tumble was down to $34 a share and $81 billion. Day-traders apparently came to their senses. Welcome to the world of investors trying to bet on the next Tesla, which could be VinFast, backed by one of the wealthiest individuals in the world. Or, will it be a better-financed Bricklin?

"The Street has all its eyes on the leaders in this next frontier with many winners, along with Tesla, in this green EV tidal wave playing out for the coming years," Wedbush Securities analyst Dan Ives recently wrote. VinFast reported a loss of more than $2 billion last year. 

Investors seem to be valuing the automaker and its potential on the level of Tesla, as well as Chinese BEV-maker BYD. But the speed at which VinFast’s street value accelerated, as the stock market has been trading sideways since the company’s IPO, is dizzying indeed. The rollercoaster ride of the shares so far is indicative of the froth around BEV stocks.

VinFast’s surpassing $200 billion in just 10 trading days stands out in comparison with BEV leader Tesla, which took more than 3,600 sessions to hit that mark, according to Bloomberg News.

The startup is majority-owned by the Vietnamese conglomerate Vingroup. The automaking entity has only been around since 2017, so its brand is mostly unknown in the U.S. and Europe.

And it’s not like Vietnam has a history of automotive engineering, manufacturing or design. Pininfarina designed the company’s current models. VinFast is almost entirely controlled by Pham Nhat Vuong, Vietnam's richest man and founder of Vingroup, with a stake of about 99.7%. It's worth noting that Elon Musk had no experience building cars either he started out.

About the Cars

The VF8, like the rest of VinFast’s planned product line, is electric. The base, 349-hp, dual-motor VF8 Eco is priced from $47,200 with an 87.7-kWh battery and an EPA-estimated range of 264 miles (425 km). The Plus model goes for about $53,000, produces 402 hp and has 243 miles (391 km) of range. The 7-seat VF9 starts at $83,000 with a range of about 300 miles (483 km). The VF6 and VF7 SUVs are coming soon.

The early reviews of the vehicles are sketchy; criticisms of the debut vehicles include unrefined steering, including a whining power-steering motor; inferior suspension and excessive body panel gaps. Build quality is perhaps on the level that China was producing a decade ago.

The VF8 and VF9 have not been evaluated yet by Consumer Reports or J.D. Power.

In 2022, VinFast sold 24,000 cars globally. That's about as many as Rivian produced last year. By comparison, Ford sold 4.2 million. In the U.S., VinFast is currently only selling its VF8 electric SUV in California through 13 company-owned showrooms.

Are comparisons to Rivian apt? After BEV-maker Rivian’s IPO, with the company backed by investments from both Ford and Amazon, and a commitment from Amazon to buy tens of thousands of vehicles, shares climbed to more than $170 in November 2021. This month, Rivian is trading in the low $20s.

Distribution

VinFast, which has shipped nearly 3,000 vehicles to North America since late last year, said on Tuesday it was changing its direct-to-consumer distribution model.

“Opening our own stores is great, but it takes a lot of time,” VinFast CEO Le Thi Thu Thuy told Reuters recently. “Joining forces with other partners to go faster has always been our nature,” she added.

Including the California stores, VinFast has opened 122 showrooms globally as of June. “We are currently defining the terms of this new model and discussing with potential partners. More details will be announced in due course,” Thuy says in a statement.