Tesla's Saudi Arabia expansion rumors dispelled by Musk: This week in EVs

Investing.com -- Here is your weekly Pro Recap of the past week's biggest headlines in the electric vehicle space: Elon Musk claims WSJ report ‘utterly false’; VinFast posts impressive results; and EVs are taking over EU.

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Musk Denies reports of Saudi expansion

Conflicting reports have emerged this week regarding Tesla's (NASDAQ:TSLA) potential expansion plans in Saudi Arabia. Initially, The Wall Street Journal reported that the EV giant was in preliminary discussions with Arab government about establishing a manufacturing facility in the country. Citing unnamed sources, the report highlighted potential challenges stemming from the complex relationship between Tesla's CEO, Elon Musk, and Saudi officials, as well as Saudi Arabia's existing collaboration with electric vehicle competitor Lucid Group (NASDAQ:LCID).

If a deal were to materialize, it could have a significant impact on Tesla's ambitious goal of selling 20 million vehicles annually by 2030, as Elon Musk has previously suggested. This objective might require around twelve additional manufacturing facilities worldwide. Currently, Tesla manufactures vehicles in the United States, China, and Germany, with plans to expand operations into Mexico.

However, the story took an unexpected turn when Elon Musk himself took to his social media platform "X" to deny The Wall Street Journal's report. Musk dismissed the article as "another utterly false article from the WSJ."

The Wall Street Journal had based its report on information from unnamed sources who acknowledged that the talks between Tesla and Saudi Arabia were still in their early stages and could potentially fall apart.

Shares of TSLA reached a weekly high of $272.13 on Wednesday before ending the week down 8%.

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Vinfast impresses with inaugural report

Vietnamese automaker VinFast Auto (NASDAQ:VFS) is making significant strides. In its first quarterly report since going public in August, Vinfast announced a remarkable 131.2% increase in revenue. The company reported Q2 revenue of 7.95 trillion Vietnamese dong ($327 million) for the period ending on June 30th. This impressive growth can be attributed to a substantial surge in deliveries, with 9,535 vehicles delivered during the second quarter, marking a more than fivefold increase compared to the first quarter. In the first half of the year, Vinfast reported a total of 11,315 deliveries, showcasing its expanding presence in the electric vehicle market.

Despite a history of losses, Vinfast achieved a valuation of approximately $85 billion upon its Wall Street debut, surpassing the valuations of U.S. automakers Ford (NYSE:F) and General Motors (NYSE:GM). This valuation surge was fueled by increased delivery volume and reductions in research and development expenses, leading to a reduction in net loss from 13.65 trillion Vietnamese dong to 12.54 trillion Vietnamese dong.

Additionally, Vinfast CEO Thuy Le revealed plans to send the first batch of electric vehicles to Europe later this year, following regulatory approval. Approximately 3,000 VF8 crossover vehicles will be shipped to France, Germany, and the Netherlands during the fourth quarter from VinFast's manufacturing facility in northern Vietnam.

This marks a significant expansion, surpassing their previous target of delivering 700 vehicles by July of the previous year. The move into the European market is strategically timed, given the European Union's investigation into Chinese electric vehicle manufacturers, potentially creating an opening for Vinfast.

Shares of VFS ended the week down 3% to $15.63/sh.

EV Surge in Europe

EVs made significant strides in the European market in August, with data released by the European Automobile Manufacturers Association (ACEA) revealing that slightly over 20% of all new cars purchased in the European Union were fully electric. This marked the first instance where EVs constituted more than a fifth of total sales, with close to 1 million fully-electric vehicles sold in the EU over the initial eight months of 2023.

Volkswagen (OTC:VLKAF), Europe's leading car manufacturer, reported a notable 21.2% increase in sales for August, according to the ACEA. Stellantis (NYSE:STLA) and Renault (OTC:RNLSY) also experienced sales growth, with increases of 6.4% and 22.3%, respectively.