Shares of VinFast Auto (VFS 10.18%) stock shot up over 60% this week, according to data from S&P Global Market Intelligence. The Vietnamese automotive group that makes electric vehicles (EVs) saw sizable early demand for its affordable SUV that is going to be sold around the world, including in the United States. Shares are still down over 95% from all-time highs when the stock shot up after its initial public offering (IPO) in late 2023.

Here's why VinFast Auto stock was soaring this week.

An electric vehicle that costs less than $10,000?

VinFast Auto is trying to bring affordable EVs to the masses. It has a range of SUVs that it plans to sell around the globe and take advantage of the EV revolution.

Its newest vehicle is the VF 3, which is launching at an extremely affordable price of just $10,000. Even after this promotional period, the car will cost just $20,000, which is still significantly less than other EVs right now. The somewhat reasonably priced Model Y from Tesla starts at over $30,000, but it's still unaffordable for many consumers even in the United States.

After just 66 hours from launching pre-orders, the VF 3 now has nearly 30,000 customer orders. This surge in demand is a great sign for the company and likely why the stock rocketed higher this week.

Stay cautious with this stock

Even though there is solid momentum with the brand, VinFast Auto is a treacherous stock that investors should be cautious of. In 2023, it lost $2.4 billion on $1.2 billion in revenue, which is a steep hole to climb out of. It is burning money quickly and will need to scale its automotive operations in order to reach profitability. With so much competition in the EV space, this will be a tough task, with success very uncertain.

We've seen this story before with other EV start-ups like Rivian Automotive, Lucid Motors, and Fisker. Carmaking is a competitive field with legacy players hitting the EV space, large pure-plays like Tesla playing a large role, and the looming supply coming from the Chinese EV brands. Even though VinFast has some momentum, it is hard to argue why anyone should own the stock right now, especially given how unprofitable its underlying business currently is.