EV Maker VinFast Bags Huge Valuation in SPAC-Mania Redux

Photo by Rutger van der Maar under CC BY 2.0

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A Vietnamese EV startup just leapfrogged legacy automakers by way of a SPAC, but that may have been the easy part.

VinFast listed on the Nasdaq via SPAC on Tuesday, en route to a closing-day valuation of $85 billion. That put it ahead of legacy automakers including Volkswagen ($69 billion), Ford ($48 billion), and GM ($46 billion). The debut comes as the EV market grows more cutthroat, with Tesla, the most valuable automaker in the world ($739 billion), looking set to unleash a new price war.

Hanoi Dreaming

VinFast started life in 2017 as a traditional fossil-fuel-guzzling automaker, but announced it would stop selling non-EV models by next year in favor of its EVs. This year, it sold 16,000 cars and started delivering to the US in March, where it has only sold 137 vehicles so far. Meanwhile, Tesla delivered 1.3 million cars in 2022, and Chinese EV maker BYD sold 1.8 million. VinFast also chalked up a loss of $2.1 billion last year.

SPACs are a volatile way to go to market, as seen by the stock’s decline of 19% on Wednesday. But VinFast’s debut also shows that there’s still clearly room in investors’ eyes for newly public companies in high-growth markets. The question for VinFast is whether it can avoid the downfalls that met other SPAC-loving EV players:

  • EV automaker Lucid Motors went public via a SPAC in 2021 at a valuation of $24 billion, and market capitalization now sits at $14.6 billion.
  • Beleaguered EV-maker Nikola also used a SPAC in 2020; its valuation has declined by more than half to $1.5 billion.

VinFast’s market debut is a strange flashback to SPAC fever, but CEO Le Thi Thu Thuy told CNBC that a SPAC wasn’t its first choice. “We were ready to do a traditional IPO. We pursued the path for almost two years but the markets have been challenging so we decided to decouple the listing from the fundraising.”

With such a chunky valuation, VinFast needs to put the pedal to the metal to step up production — especially since Thuy promised it would sell 50,000 vehicles this year, meaning it has four months and change to sell more than double the number of cars it has sold so far. Given Tesla announced two price cuts to its China models within the space of three days, VinFast execs might be starting to sweat.

That’s A Lot of Energizer Bunnies: On Wednesday, a battery manufacturer and one of Tesla’s big suppliers said it’s made a battery capable of fast-charging an EV to 250 miles of range within 10 minutes. Since one of the biggest hurdles for prospective EV buyers is “range anxiety,” this is a very exciting announcement for Elon Musk and Co. That is, if he can tear himself away from patrolling for Mark Zuckerberg.