Tesla continues waging price war; VinFast makes U.S. debut: This week in EVs

Investing.com -- Here is your weekly Pro Recap of the past week's biggest headlines in the electric vehicle space: VinFast makes a splash in its market debut; Tesla cuts prices in China; and Mullen continues to fight delisting.

As always, InvestingPro users get EV headlines at lightning speed. Never miss another opportunity to secure an edge for your portfolio.

VinFast makes an entrance

Vietnamese electric-vehicle maker VinFast (NASDAQ:VFS) marked its inaugural appearance on the U.S. stock exchange this past week, and experienced an astonishing 270% surge on its first trading day to a peak of $37 before taking a dramatic fall.

The stock began trading at $22 per share following its merger with special-purpose acquisition company Black Spade, putting the value of the company at about $50 billion - more than double the $10 per share, or $23 billion, agreed to with Black Spade. And the ensuing action propelled VinFast’s market cap above $85 billion, higher than Volkswagen (OTC:VWAGY) (ETR:VOWG_p) and Ford (NYSE: NYSE:F), which are valued at $69.7 billion and $48B, respectively.

Since its peak, the stock has plunged about 45%. But even at the lower valuation, VinFast indicated it had the biggest market capitalization of any Vietnamese company trading in the U.S.

VinFast is a household name in Vietnam, where its cars have become bestsellers. However, the automaker has had some trouble transitioning their public popularity to the U.S., where it started delivering to customers earlier this year.

Over the past few months, VinFast has faced a wave of negative feedback regarding its electric SUV, the VF 8, after letting U.S. reporters test drive the vehicle.

One headline by industry outlet Road & Track called the vehicle “simply unacceptable.” Another by MotorTrend simply stated, “Return to sender.”

In a blog post earlier this week, VinFast said that it made software improvements based on feedback “from vehicle owners and the automotive reviewer community.” However, it is yet to be seen if these changes can also change the minds of the public.

Shares closed the week at $15.40.

Tesla continues cutting prices

EV giant Tesla (NASDAQ:TSLA) continued its price war this week, announcing lower pricing for its Model Y long-range and performance models in China. The company added that it would also be offering insurance subsidies to buyers of its entry-level, rear-wheel drive Model 3 in the country until the end of September.

Tesla sales in China saw a 31% drop in July, the first decline since December. The company has been offering deeper discounts both in and out of China since late last year in an attempt to protect its position as a market leader.

CEO Elon Musk hinted in an analyst call last month that the company would continue to slash prices even if it erases profit margins, arguing that the value of their cars will increase once Full-Self Driving is perfected.

Mullen rides delisting line

Emerging EV maker Mullen (NASDAQ:MULN) launched a $25 million stock buyback program this week, with plans to purchase 3.7M shares of common stock through the end of the year.

The program signals the company’s efforts to remain in good standing with the Nasdaq trading rules.

According to the rules, a company’s per-share price must meet or exceed $1. If a company fails to meet the minimum requirement for 10 consecutive trading days, they will be at risk of delisting.

Mullen initiated a 9:1 reverse stock split last week, bringing its share price from $0.11 to just over the $1 mark. However, the automaker has had a hard time maintaining that price, quickly dipping below the mark and placing itself at risk yet again.

“We believe that our stock is undervalued.” said CEO David Michery. “The Company has begun production of our Class 3 EV with deliveries pending to customers and a strong balance sheet allowing us to execute on our business plan.”

Shares closed the week at $0.64.

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