Will Vinfast Raise The Bar In The Automotive Sector?

By Author: joy
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Vietnamese electric vehicle (EV) manufacturer VinFast recently went public on Nasdaq, closing above $37 per share, leading to an $85 billion valuation—higher than Ford ($48 billion) and General Motors ($46 billion). VinFast's founder, Pham Nhat Vuong, already Vietnam's richest person, saw his wealth grow by $39 billion. This event underscores increasing interest in the EV sector and signals Vietnam's emergence as a competitor to China in the US EV market.

VinFast's journey to go public concluded via a deal with SPAC Black Spade Acquisition, enabling Nasdaq trading without IPO issuance. Unlike EV makers like Lordstown Motors and Faraday Future, which suffered post-merger stock value losses, VinFast's strong backing by Vingroup is seen as an advantage. Bill Russo of Automobility suggests VinFast's success could differ due to Vingroup's proven growth track record.

However, VinFast will face established automotive giants in the EV market. Ford aims to enhance its commercial vehicles by integrating software, potentially increasing revenue by $4,000 to $5,000 per vehicle. By offering software-driven fleet services, ...
... safety features, partial autonomy, and insurance, Ford plans to tap into the revenue stream. Navin Kumar, CFO of Ford Pro, indicates profitability projections amid a shift towards software-oriented offerings. The company eyes its next-gen electric commercial vehicles as well as achieving 2026 targets for connected vehicles and paid software integration.

The current Ford F-150 Lightning EV might not be cost-optimized, but Kumar anticipates profitability improvements in successors. The automotive industry is forecasted to witness significant growth, with light commercial vehicles and passenger cars projected to increase from 89 million vehicles in 2019 to 102 million vehicles in 2030. Simultaneously, the automotive software and electronics market is expected to nearly quadruple during the same period. This trend signifies the evolving landscape of the industry toward software and services revenue generation.

In summary, VinFast's successful Nasdaq debut highlights the growing significance of EVs and the emergence of new players like Vietnam in the automotive market. Ford's software-driven approach to enhance revenue and profitability reflects the broader industry trend towards integrating technology into vehicles and services.

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