Vietnamese EV automaker VinFast can continue its development and steadfast global expansion, thanks to a fresh round of funding from parent company VinGroup and its chair, Mr. Pham Nhat Vuong. The chair has offered up $1 billion of his own assets to the automotive branch just months after telling the public that the well had run dry.
VinFast is a young EV automaker that came out absolutely sprinting off the starting line with immediate plans for simultaneous market entry into the US and Europe, a potential IPO, and several all-electric models entering production.
The ambitious company has cramped up a bit in recent months, learning that scaling an EV manufacturing business is not only quite difficult but super expensive. According to a December 2022 filing with the SEC, VinFast reported whopping net losses of $1.3 billion in 2021 and $1.45 billion through September 30, 2022, with additional losses expected to incur “in the near term.”
This past February, Chair Pham Nhat Vuong of VinFast’s massive parent company, VinGroup, publicly stated he had no intentions to invest any more of his personal money into the automaker. Vuong’s personal assets contributed to the initial $7.5 billion already allocated to VinFast from 2017-2022, alongside money from VinGroup and other lenders.
Today, VinFast is celebrating billions in new funding from VinGroup, but it’s the Vietnamese conglomerate’s chair who is taking the biggest hit to his wallet.
VinGroup chair believes in VinFast, pledges funding
According to VinFast, it has secured $500 million in nonrefundable grants from VinGroup and another $1 billion in funding from chair Pham Nhat Vuong. Vuong’s net worth is currently around $4.3 billion, meaning he is contributing nearly a quarter of his assets to VinFast over the next year to enable it to keep going. That’s wild.
Clearly, the chair believes in the automaker, which has made large, quick strides, with EVs finally shipping to US soil. A spokesperson for the chair spoke to the massive bet on the EV sub-brand:
To build a national brand that can compete in the international market is particularly difficult, challenging, and even requires sacrificing immediate benefits. Mr. Pham Nhat Vuong plans to donate some of his personal assets to energize VinFast during the pivotal acceleration period to create a mark of Vietnam in the world’s electric vehicle market. The success of VinFast will promote the development of Vietnam’s industry and technology while actively contributing to the global green transformation.
In addition to the $1.5 billion already confirmed, VinFast relayed that it now has access to an additional $1 billion in loans from VinGroup to be paid back within the next five years. VinFast says it will use the fresh funding to continue EV development and achieve its global growth goals. VinGroup CEO Mr. Nguyen Viet Quang also spoke:
The growth potential of VinFast has been demonstrated in the past five years. This is a pivotal period for VinFast to accelerate towards a solid competitive position in the world’s electric vehicle market. As the parent corporation of VinFast, Vingroup is providing support to enable VinFast to continue its development and secure its future. The grant and loan of $1.5 billion is Vingroup’s additional capital contribution for the breakthrough development of VinFast in the future. This is also once-in-a-lifetime opportunity for the development of Vietnam’s industry. We call on everyone to support and build a world-class Vietnamese brand.
VinFast has already introduced six all-electric models to the public, including the new VF 5, but will need to sell hundreds of thousands of them to repay its parent company.
Author: Scooter Doll
Source: Electrek
