VinFast's stock takes a dive amid stagnant EV sales
VinFast, an electric vehicle (EV) manufacturer backed by Vietnam's richest individual, has experienced a significant 65% drop in its stock value this year. This decline underscores the difficulties the company is facing in an increasingly competitive market. Despite ambitious plans to triple vehicle delivery to 100,000 units this year, VinFast only managed to reach a tenth of that goal in the first quarter.
Analysts question VinFast's ambitious global expansion
Analyst Ken Foong has expressed skepticism about VinFast's aggressive growth strategy. Foong stated, "VinFast is too ambitious and could continue to face challenges as it expands rapidly overseas." The company, under the control of Pham Nhat Vuong, is attempting to break into the global market amid fierce competition from Chinese manufacturers and price cuts by Tesla.
VinFast's market value plummets post-US debut
Following an impressive US market debut in August, which saw VinFast's stock surge by 700% within two weeks, the company has since lost over 90% of its market value. Despite this setback, Vuong, who owns nearly 98% of the company's shares, remains committed to investing an additional $1 billion of his personal wealth into the firm. He anticipates that VinFast will either break even or post a positive gross profit by 2025.
VinFast's sales and expansion plans under scrutiny
In the first quarter of 2024, VinFast reported a loss of $618.3 million, delivering only 9,689 cars, after selling a total of 34,855 vehicles in 2023. Despite this, there was an increase in US sales which accounted for over 10% of deliveries during this period. However, the company's ambitious expansion plans including a $2 billion manufacturing complex in North Carolina and planned facilities in Indonesia and India may further strain its balance sheet.
