VinFast is worth more than Ford and GM. But she didn’t sell many cars

CNN
–

Vinfast, the Vietnamese electric car company, is already more valuable than Ford

(F) and GM

(GM), based on its share price, despite its entry into the US market. But you may not even have heard of it. Here’s what it’s about and what’s going on with it.

Excited investors pushed VinFast stock up 270% on its first trading day, before plummeting nearly 19% on Wednesday. However, these investors currently only own 1% of the automaker. The sprawling Vietnamese conglomerate, VinGroup, owns the rest.

But VinFast’s bold entry into the US wasn’t smooth sailing. For one thing, when critics got a chance to drive the company’s first product in the US, the VF8 electric SUV, the resulting reviews weren’t what any automaker could hope for.

Many of the addresses were particularly frank. “Simply unacceptable,” read the headline from road and track. A headline said: “Yikes” From InsideEVs. “Back to sender,” MotorTrend wrote at the top of its EV review.

“The ride was really rough, and the material quality inside the car was really bad. There were gaps in the panel that were mismatched. There were creaks we heard from the windshield,” said Miguel Cortina, editor at MotorTrend. “There are a lot of issues with the quality of the car, in the way she drives.

Not every port was so harsh. Arstecnica called VF8 “a shaky but promising American debut”.

VinFast seems to have received at least some criticism. at recent days blog postThe company acknowledged that critics and customers “identified areas where we could best adapt to the preferences of US consumers.” In response, VinFast performs software upgrades that the company does not detail.

Cortina said some of the issues journalists reported with the VF8, such as issues with navigation and blind spot monitoring, could be fixed with software, but others would require manufacturing improvements.

The novelty doesn’t quite justify the poor critical response. Other electric car makers, such as Tesla

(TSLA)and Rivian and Lucid, garnering rave reviews and awards with their first products. And VinFast had the advantage of making cars before, albeit relatively few and not for the highly competitive US market. VinFast was only founded in 2017 and unveiled its first cars, two petrol-powered sedans, at the Paris Motor Show in 2018.

Soon after, the company decided that it would only manufacture and sell electric vehicles.

Other auto companies, such as South Korean automakers Hyundai and Kia, eventually became successful in the United States despite starting with products that were notable for quality issues. These examples suggest that designer automakers can recover from a bad start.

In 2022, VinFast has sold 24,000 vehicles globally. That’s roughly how many Rivian produced that year. By comparison, the Volkswagen Group sold 8.3 million vehicles in 2022 and Ford sold 4.2 million vehicles.

In the United States, VinFast currently sells the VF8 electric SUV in California through 13 company-owned showrooms. The larger VinFast VF9 is expected to be available later this year, with the smaller VF6 and VF7 SUVs due sometime next year, as the company begins offering its products in more US markets.

It seems that there is no industry in which VinGroup does not step in. It operates technology companies including VinSmart, VinBigData, VinBrain, and VinAI, among others. Vinmec operates hospitals, while Vinhomes is just one of VinGroup’s real estate companies. VinGroup is proud that the non-profit VinSchool, which serves students in K-12, is now the largest school system in Vietnam. Once students graduate, they can transfer to VinUni, a VinGroup college, and on vacation, families can go to VinWonders amusement park.

The company claims that it represents 1.1% of Vietnam’s GDP. In 2022, VinGroup generated a profit of VND 12.8 trillion, equivalent to about US$535.7 million, on about US$102 trillion, or roughly US$5.3 billion, in total revenue.

Right now, VinFast is a small part of a much larger company. But VinGroup clearly has big plans, assuming it can get past some of its early quality issues.