VinFast Auto (VFS 0.24%) stock is falling fast and furious in the new year, shedding 17% in the first trading week of 2024 through Friday at noon.
Ironically, VinFast moved to boost sales in the U.S. this week and is all set to launch new models at the Consumer Electronics Show (CES) in the coming days. The electric vehicle (EV) stock even bagged a buy rating from an analyst this week who sees more than 40% upside in the stock from its Friday opening price. So why is VinFast Auto stock falling?
VinFast is focused on growth
Let's take a look at the good news first.
To start, VinFast Auto signed up five dealers in four states across the U.S. this week to boost sales. The Vietnamese EV maker already operates 17 retail stores and service centers in California, and now plans to add 125 dealers to its network. VinFast currently sells only the VF 8 all-electric SUV in the U.S., but will soon launch other models including the VF 6, VF 7, and VF 9 in the market.
NASDAQ: VFS
Key Data Points
Meanwhile, there have been rumors this week that VinFast is about to open its first EV manufacturing facility in India.
The EV maker will also participate in the CES 2024 next week in Las Vegas where it will introduce its mini car VF 3 and electric bike, DragonFly, to global customers. VinFast first started producing e-scooters in 2018 and ventured into cars only later. As of Sept. 30, 2023, the company had delivered a total of 210,000 e-scooters but only 115,000 gasoline and electric vehicles combined.
Why VinFast Auto stock is still falling
The thing is, VinFast has a tiny free float, which means only a fraction of its shares are available to the public for trading. That means the stock attracts fewer investors and more traders and speculators, making it highly volatile.
Otherwise, VinFast Auto does look like the kind of stock that may have something to offer investors. It expects to deliver 40,000 to 50,000 vehicles in the full-year 2023 and is focused on expanding its global footprint. This week, analyst Greg Lewis from BTIG initiated coverage on VinFast stock with a buy rating and a price target of $10 a share. The analyst sees the EV maker growing sales exponentially over the next couple of years or so.
