Electric vehicle (EV) manufacturer VinFast announced on Wednesday it has secured a fresh round of funding worth 85 trillion dong ($3.35 billion) from its founder, Pham Nhat Vuong, and parent company, Vingroup, to support its expansion efforts. The funding, expected to be disbursed by 2026, aligns with the company’s goal to reach financial break-even.
The company, which began operations in 2019, has seen significant growth internationally but continues to face increasing losses amid lower demand and sectoral challenges. According to the statement, around 50 trillion dong ($1.97 billion) of the funding will come from Vuong, while Vingroup, one of Vietnam’s largest conglomerates, plans to contribute up to $1.38 billion through lending and potential divestments, if needed.
As part of its support measures, Vingroup also plans to convert all current loans to VinFast into preferred shares with dividend entitlements. Vuong, holding 97.9% of VinFast’s shares, reaffirmed his commitment to the automotive unit during an April general meeting, underscoring plans for additional investment if necessary. VinFast noted that it is actively seeking independent capital to meet its financial needs, with Vingroup and Vuong’s support serving as a contingency.
Since 2017, VinFast has received approximately $13.5 billion in capital from Vingroup, its affiliates, and Vuong, with the latest funding commitments bringing the total investment to nearly $17 billion.
Despite its primary focus on the North American market, VinFast has faced challenges in building brand recognition and expanding sales outside Vietnam. The company recorded a net loss of $773.5 million in the second quarter of 2023, marking a 27% rise from the first quarter and a 40% increase over the same period last year. Further losses are anticipated in the coming quarters.
In July, VinFast delayed its $2 billion manufacturing complex in North Carolina to 2028 due to challenging market conditions. The automaker, along with others, is preparing for potential policy shifts, including new U.S. tariffs on foreign-made vehicles and possible changes to pro-EV policies under the incoming administration.
