VinFast will get a $3.4 billion funding boost from parent company
11/12/2024 04:41 PM
Vietnamese electric vehicle (EV) maker VinFast has announced a new funding commitment from its parent company, Vingroup, as it aims to make its EVs profitable in the coming years.
VinFast has said it will gain an additional round of funding from Vingroup by 2026, valued at 85 trillion dong (~$3.35 billion), according to a report from Reuters. The funding round will come as VinFast also expects its EVs to reach profitability by 2026, with Vingroup and others having invested roughly $13.5 billion into the EV company so far.
Upon receiving the funding round, total investments into VinFast would rise to around $17 billion. Vingroup also says it will also convert its current loans to VinFast Vietnam into preferred shares with dividend entitlements.
A company statement highlighted the fact that around 50 trillion dong (~$1.97 billion) of this funding round will be directly from VinFast founder and entrepreneur Pham Nhat Vuong, echoing the automaker’s committments to garnering independent investments made earlier this year.
“VinFast remains committed to raising independent capital to meet its financial needs,” VinFast said in the statement. “The support from Vingroup and Vuong will be utilised only if these independent efforts fall short.”
Vingroup is one of Vietnam’s largest company conglomerates, and the company has said it will lend up to $1.38 billion between now and 2026, along with the funding directly from the founder.
The news comes as VinFast has expressed difficulty in selling its vehicles internationally, and the company is targeting North American markets in particular. In July, the EV maker announced that it would be putting a $2 billion manufacturing project on pause in North Carolina due to market conditions. Now, the automaker is aiming to start the project in 2028.
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