Vietnam’s largest electric vehicle (EV) maker is on the rise today; VinFast (NASDAQ:VFS) stock is up more than 110% on news that the country’s untapped rare earth deposits have attracted a number of Korean and Chinese magnet firms. Indeed, according to South Korean-based Star Group Industrial’s (SGI) Vietnam project, the country will be capable of outputting 5,000 tons of high-end neodymium magnets per year by 2025, enough for 2 million EVs.
Vinfast has been on a virtual roller coaster since its brow-raising initial public offering (IPO) last week. What does today’s news mean for the company?
Well, if anything, it reaffirms Vietnam’s place in the burgeoning EV race.
As per today’s report, Korean and Chinese magnet firms are planning to open factories in Vietnam due to the country’s newly discovered supply of rare earth metals. If you recall, South Korea signed a deal with Vietnam this past June as part of efforts to enhance its supply of crucial minerals. Vietnam is one of the only countries outside of China with a fully-developed magnet supply chain. That said, Vietnam only produces 1% of the world’s magnets, far below China’s 92%, per Adamas Intelligence data.
Should SGI’s plant achieve full capacity, however, it will represent almost 3% of the 2022 global output. This is equivalent to close to 50% of U.S. neodymium magnet imports last year.
Apparently, China and South Korea aren’t the only ones with a new interest in Vietnam either. U.S. officials have indicated they are also keen on Vietnam’s rare earth potential amid talks to strengthen relations between the two countries.
VFS Stock Soars Following Blockbuster IPO
VinFast has been the talk of Wall Street since its IPO via special purpose acquisition company (SPAC) on Aug. 15. Within just 24 hours of its Nasdaq debut, VFS soared more than 255%, earning a valuation of $86 billion, surpassing the likes of General Motors (NYSE:GM) and BMW (OTCMKTS:BMWYY) in terms of market capitalization.
That isn’t to say it’s been a purely upwards trend for the company. Indeed, after its meteoric rise, investors succumbed to some near-term bearish pressure, selling off VFS stock by as much as 58% before resuming its climb.
As such, today’s news reaffirms both Vietnam and VinFast’s relevancy in the growing EV ecosystem. VFS is up over 110% today to $37.50 per share.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
