Where Will VinFast Auto Stock Be In 10 Years?

If you feel that the world doesn’t need another electric vehicle (EV) maker, you’re certainly not alone in that opinion. However, the world is a better place, and there may be room for Vietnam-based EV manufacturers VinFast Auto (VFS -3.66%) grow over the next ten years.

Of course, there’s no crystal ball that can tell investors whether VinFast’s market value will expand through 2034, or whether the company will be around by then. However, if you have a speculative side to your personality and can forgive some financial mistakes, VinFast stock may find a small place in your long-term portfolio.

VinFast gets “Wild” with concept cars

In an increasingly crowded global EV market, new startups must emerge to survive. At least, that seems to be the basic concept behind VinFast’s recent car model releases.

VinFast hopes to penetrate the US EV market and “expects to reach approximately 130 points of sale in (North America)” by the end of this year. Meanwhile, the company released no less than four new SUV models last year Vietnam.

Clearly, VinFast is very active and ambitious despite evidence of slowing sales growth in the global EV market. In defiance of this evidence — or, perhaps, in response to a slowdown in market growth — VinFast has produced several eye-catching car models.

One of them is the VF Wild midsize electric pick-up truck, which has a flexible bed size that can be adjusted from 5 to 8 feet in length. That, along with the vehicle’s sleek and curvy appearance, is VinFast’s main selling point, although the vehicle it also has a “panoramic glass roof and digital side mirrors to improve aerodynamics.”

Also “wild” in its own way, VinFast’s VF 3 mini-SUV is, for lack of a better descriptor, adorable. As small as it is, the VF 3 seats four and has a driving range of over 125 miles on a full charge. And it’s easy to imagine the VF 3 fitting into parking spaces that couldn’t accommodate full-size EVs.

VinFast’s unusual car offerings don’t just stop at cars. Not long ago, the company launched the DrgnFly e-bike, which sports what the company calls “a V-shaped, raised shape reminiscent of the shape of a flying dragon.” DrgnFly also offers up to 63 miles of range, so open-minded cyclists won’t have to pay as often.

Charge for incremental revenue

If either of these concept cars goes ahead, VinFast’s sales could grow even faster in the next 10 years. The company is already showing impressive sales growth, even if this doesn’t seem to be reflected in the share price.

Indeed, there could be an interesting buying opportunity here based on the divergence between VinFast’s stock price and the company’s sales trend. In the fourth quarter of 2023, VinFast’s revenue grew 133% year over year to $437 million. For the full year, the company’s revenue increased by 91% to $1.2 billion.

VinFast’s Q4 2023 gross margin of negative 40.1% and full-year margin of negative 46% will certainly put off some potential investors. But these results represent a solid improvement over the company’s Q4 2022 and fiscal 2022 highs of negative 82.6% and negative 82%, respectively. Also, note that VinFast spent $213 million in Q4 2023 to develop the company’s VF 6 and VF 7 SUV models, building VinFast’s. North Carolina based production plant, and develop showrooms and payment centers, among other things.

As with every other EV startup, VinFast could go out of business within 10 years and the company’s stock price could go to zero. That is why I think it is important to maintain a small position size in VinFast stock, if any.

It is possible that VinFast could capture the global market for unconventional, concept-driven, and new-energy vehicles. Apparently, even VinFast’s “wild” EVs are fully functional and have good driving ranges.

Moreover, they look very attractive and will attract aspiring drivers. So, if VinFast can capitalize on the “wow” factor of its eye-catching EVs and continue to close the margin gap, there can only be more burgers here.