Vinfast issued an earnings report for the second quarter of 2023 on Thursday, and the news is not good for the Vietnamese electric vehicle maker.
The company lost $526.7 million between April and June, and $598 million in losses were reported during the first quarter of this year, bringing its total losses to over $4.5 billion since 2021, when it started offering electric vehicles.
VinFast tried to lessen the blow by stating that the losses for the second quarter of this year were about 8% lower compared to the first quarter.
The latest report of the company’s money woes comes on the heels of another report that said the automaker had sold 11,300 vehicles during the first half of 2023, with more than half, 7,100, sold to the company itself.
Barron’s first reported the news after a filing by the company with the Securities and Exchange Commission was released Tuesday.
The 7,100 EVs were bought by Green and Smart Mobility, a Vietnamese taxi company controlled by Vingroup, owners of VinFast.
The company has seen more downs than ups since first announcing its plans to build a $4 billion manufacturing plant in Moncure, Chatham County. Plans to first open the plant were pushed back from 2024 to 2025.
In February, it announced plans for layoffs, cutting 80 jobs in the U.S., including its chief financial officer.
Next came brutal reviews of its VF8 City Edition vehicle with the words “abysmal”, “very, very bad”, “yikes”, “simply unacceptable,” and “return to sender” in May after multiple issues, including basic functions not working reliably, were noted in many auto magazines and websites.
Safety concerns related to those reviews had the National Highway Traffic Safety Administration (NHTSA) recall all 999 VF8 2023 vehicles sent to the US later that month.
Some good news did occur for the company in July when the groundbreaking for the manufacturing plant in Triangle Innovation Point took place.
Unfortunately, more bad news cropped up in August when VinFast was accused of allegedly polluting waterways, including the Haw River, near the site of the proposed plant in Moncure.
On Aug. 15, the company began trading on the Nasdaq, a move made possible when Black Spade Acquisition Company shareholders agreed to approve the merger with VinFast.
The company’s stock valuation rocketed past Ford and General Motors (GM) on its first day of trading, closing above $37 a share, giving it a stock valuation of $85 billion, compared to Ford’s $48 billion and GM’s $46 billion. Shares continued to climb to a peak of $82.35 on Aug. 28, with a valuation of $190 billion.
But the rally was short-lived, with shares closing at $17.21 on Sept. 13.
The Wall Street Journal also states the recent crash in the shares of VinFast serves as a warning of the latest trend of Special Purpose Acquisition Companies or SPACS that ends with “everyday investors getting burned.”
The WSJ explains that “unlike with traditional initial public offerings, SPAC deals let companies make lofty business projections and draw in individual investors before mergers are completed. Anyone can buy shares of the shell firm before it combines with the target company, making the deals more accessible than IPOs, which are typically limited to professional investors before listings are complete.”
According to SPAC Research, the move has led to shares of about 400 companies that went public through SPACs since 2020 to fall more than 55% on average. Many have filed for bankruptcy or been taken private at much lower valuations.