Vinfast Nowhere Near Its 2023 Targets, Share Price Struggles to Hold Up
Key Takeaways
- VinFast said it expects to deliver 40,000 to 50,000 electric vehicles in 2023, despite only delivering 7,400 in 2022
- In the first half of 2023, it only delivered 11,315 vehicles
- Since being listed on the Nasdaq in August, VinFast (VFS) surged to a $93 high, but has since fallen over 86%
Vietnamese electric vehicle manufacturer VinFast recently announced its ambitious expectations to deliver between 40,000 and 50,000 EVs this year. This target marks around seven times as many as the 7,400 it sold throughout 2022, and nearly five times the number of vehicles it sold through the first half of 2023.
Shortly after being listed on the Nasdaq this August, VinFast’s valuation surged to unforeseen levels, dwarfing those of automotive giants General Motors and Ford at its August highs. However, its share price has since seen a violent correction of nearly 90%.
VinFast’s parent company, Vingroup, has seen a similarly violent correction, currently being down over 63% from its highs in April 2021, and nearly 40% lower than its highs this August.
Are VinFast’s targets for 2023 achievable?
VinFast’s target to deliver 40,000–50,000 EVs this year is optimistic, to say the least. Through the first two quarters of 2023, it only delivered 11,315 vehicles. Of these sales, 7,100 were to a Vietnamese taxi company, Green and Smart Mobility — a company also controlled by VinFast’s parent company, Vingroup.
VinFast’s plans to meet its target involve a successful expansion into North America, and has started building a factory in North Carolina. Thus far, things are looking bleak for the company, with fewer than 200 units delivered in the U.S. in the first half of the year.
Regarding its current progress, VinFast has said, “[It is] ramping up production to ensure delivery targets in international markets. Besides, VinFast will soon expand to Southeast Asian and Middle Eastern markets soon, which will also boost our production.”
What’s happening with VinFast’s share price?
VinFast began trading on the Nasdaq on August 15. On its first session, it soared more than 250%, giving it an enormous implied valuation. However, critics noted the overvaluation, citing its slow sales and unfavorable reviews of its VF8 model in the U.S.
VinFast (VFS) saw a blow-off top of $93 on August 28, and has since seen a brutal downtrend, currently trading at $12.41 — a drop of nearly 90%. VinFast’s chief executive, Le Thi Thu Thuy, insisted this volatility is nothing unexpected, “It’s normal for the share price to be very volatile at the beginning of the listing, especially with such a very small free float.”
Shifara Samsudeen, an equity analyst from LightStream Research, said, “It seems unlikely for VinFast to meet its 50,000 EV target for 2023 and our revised forecast suggests there is further downside despite shares dropping more than 50% vs IPO.”
The bottom line
Pivoting to the U.S. market is undoubtedly an audacious move by VinFast. While it’s struggled to find its footing so far, the picture isn’t entirely bleak: in July, it opened six showrooms in California, including a flagship store in Santa Monica.
According to figures published by VinFast, it has received around 17,000 orders for its VF8 and VF9 models worldwide, of which around 10,000 were in the U.S.
However, it only has around 350 vehicles, all of which are VF8, currently on the road in the U.S., and certainly is set to face an uphill battle in the country’s Tesla-dominated electric vehicle market.
