Vietnamese version of Tesla, VinFast, goes public in the US, with its stock price surging over 170% during trading hours.

On Tuesday, August 15th, Vietnamese electric vehicle manufacturer VinFast completed its merger with a special purpose acquisition company (SPAC) called Black Spade Acquisition and began trading on the NASDAQ. Its stock price surged over 170% during intraday trading, reaching a high of $28.50.

Established in 2017, VinFast is a subsidiary of Vingroup, one of Vietnam's largest publicly traded companies, owned by Vietnam's richest man, Pham Nhat Vuong. Vingroup operates in various sectors including industry, real estate, and technology, with the group's revenue accounting for 2.2% of Vietnam's GDP in 2022. VinFast was initially established with the hope of developing Vietnam's national automobile industry, and Pham Nhat Vuong even set Tesla as its benchmark.

To date, VinFast has exported approximately 2,100 electric vehicles to the United States and nearly 800 to Canada.

Prior to the merger with VinFast, Black Spade Acquisition closed at $10.45 on Monday. Following the merger, the new company opened at $22 on Tuesday.

According to documents submitted to the U.S. Securities and Exchange Commission in June, the deal with Black Spade valued VinFast at approximately $23 billion, making it the largest Vietnamese company to go public in the U.S. by market capitalization.

Madame Thuy, CEO of VinFast, stated:

Going public in the U.S. is an important milestone for us. This listing will open the door to the capital market for our future.

Regarding the overall price pressure faced by VinFast after a series of price reductions by Tesla and other electric vehicle competitors earlier this year, the company stated that its strategy is to "offer high-quality products at affordable prices and provide excellent after-sales service":

Our product pricing has always been very competitive compared to similar products. But when consumers delve into our products, they will discover that we have more features and more technology. So I believe consumers are starting to recognize the value our products bring.

We strive to maintain competitiveness and profitability in each market. I believe profitability will come along with an increase in sales. Currently, we will stick to our strategy.

Currently, the starting price for VinFast's 5-seater VF 8 in the United States is $46,000, while the base model of Tesla's 5-seater Model Y starts at $47,740.

However, Tesla passenger vehicles are eligible for a $7,500 federal tax credit in the United States, while VinFast vehicles, as they are not manufactured in the U.S., do not currently qualify for tax exemptions.

In order to compete with brands in the U.S. market, VinFast announced last month that its electric vehicle manufacturing facility in North Carolina has officially broken ground after a delay. The first phase of the factory has a total investment of up to 2 billion US dollars and covers an area of approximately 1,800 acres. It is divided into five main production areas, including body workshop, assembly workshop, stamping workshop, painting workshop, and energy center. Other functional facilities will also be set up in the factory area.

In the initial stage, the factory will focus on producing VinFast's VF 7, VF 8, and VF 9 electric vehicles, with an expected annual production capacity of 150,000 vehicles. The supplier base for components and materials of the factory will mainly be concentrated in the United States, Vietnam, and some other countries. In addition, the expansion and updates of the factory will be determined in the next phase.

VinFast stated:

The North Carolina factory will help us significantly reduce costs and provide products to American customers at affordable prices.

The establishment of VinFast's factory in the United States and its path to going public have not been smooth sailing.

The company's planned factory in North Carolina was originally scheduled to start production in 2024, but now the start date has been postponed to 2025. Prior to that, all cars sold by VinFast in the United States will be imported from its production center in Vietnam. VinFast started selling cars in California, USA in March this year, but was recalled two months later due to a safety warning issued by the National Highway Traffic Safety Administration.

In addition, like many Asian companies setting up factories in the United States, the process of establishing a factory in the United States is often more difficult and time-consuming than expected due to significant differences in regulations and policies between the United States and the local area.