You’d think that to be one of the world’s most valuable car companies, you’d need to move a lot of hot rods.
Well… you’d be wrong.
Driving the news: Buzzy Vietnamese electric vehicle (EV) maker VinFast disclosed in recent regulatory filings that nearly two-thirds of the vehicles it sold in the first half of the year were purchased by a taxi company owned by its parent company, Vingroup.
- Even with a helping hand from its corporate overlords, VinFast is still waaay behind its chief EV competitors, as it projects to sell just 50,000 vehicles this year.
- The company has also faced major setbacks in its planned North American expansion. It was forced to recall the first batch of 999 vehicles it sent to the US last year due to safety concerns while US reviewers lambasted them for poor quality.
Yes, but: Despite dodgy quality and basically non-existent sales, VinFast was briefly the third most valuable automaker by market cap last month after listing via a SPAC. While its valuation has since tumbled, it’s still worth more than the likes of Hyundai, KIA, and Nissan.
- VinFast has also been busy promoting its brand around the world, including in Canada—it was an official sponsor of the CNE this year and has a display at TIFF.
Why it matters: VinFast is perhaps the prime example of the pie-in-the-sky thinking that has fuelled EV startups and the disparity between what they’re worth and what they produce.
- It certainly helps that over 99% of the company is owned by Pham Nhat Vuong, Vietnam’s richest man, who has made it clear that he’s willing to throw money at Vinfast to grow it.
Zoom out: VinFast isn’t the only EV business that has launched to much fanfare only to disappoint when the rubber meets the road (driving puns, anyone?). Formerly Ford-backed Rivian has dealt with chronic production issues, EV van startup Canoo is now mostly focused on government contracts, and startup Lordstown Motors filed for bankruptcy this year.—QH