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Earnings season hasn’t been a great time for owners of electric vehicle (EV) stocks. Disappointing reports from several EV makers have only stoked fears that demand could be plunging.

But shares of VinFast Auto (NASDAQ: VFS) have jumped by double digits this week regardless. As of late Thursday, VinFast stock has risen by nearly 12% this week, according to data provided by S&P Global Market Intelligence. However, it’s not because VinFast has been doing so much better than other EV start-ups.

Through-the-roof volatility

VinFast’s stock has been extremely volatile since it began trading after going public through a special purpose acquisition company (SPAC) in August. In fact, shares have moved an average of about 15%, either up or down, every day since the SPAC merger, according to Barron’s.

So after EV makers including Tesla, Lucid Group, and others reported disappointing quarterly reports, it wouldn’t be surprising to think that any big move in VinFast shares would be down. But that would have been wrong this week, and it highlights just why VinFast shares should be avoided by individual investors.

Trading vehicle

The high volatility — partly due to a low number of shares being made available to trade — has attracted traders rather than investors. That’s the most logical explanation for this week’s move higher. It wasn’t the most recent quarterly update from the Vietnamese EV maker that would have ignited much more interest in owning the stock.

VinFast only delivered about 10,000 EVs in the third quarter. That was only about 500 more than it shipped in the prior quarter. As recently as last month, the company was still working on raising fresh capital to fund its growth.

A stock like this is pure speculation, made even riskier from the high trading volatility. Those who want to be invested in the EV sector shouldn’t be attracted to VinFast, even with its double-digit gains this week.

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Howard Smith has positions in Lucid Group and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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