According to the CEO of VinFast, the electric vehicle maker backed by billionaire Pham Nhat Vuong, there are currently no plans for Vuong to invest any more of his personal fortune into the company. Despite falling behind on its factory construction plans in the U.S. and reducing staff, the company will continue to rely on its existing funding.
Vuong, whose net worth is estimated at $4.1 billion, serves as the chairman of Vingroup, a conglomerate with interests in real estate, leisure parks, and a university. VinFast was established by Vuong in 2017 and has since received investments from its owners and lenders amounting to $7.5 billion as of September.
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Although VinFast is facing some setbacks in the construction of its U.S. factory and employee reductions, the company is not currently seeking additional funds from Vuong’s personal wealth. VinFast’s success will continue to depend on its existing sources of capital, and it remains to be seen whether the company can overcome its current obstacles and achieve long-term growth.
“Currently, Mr. Vuong has no plans” to personally invest further in VinFast, CEO Le Thi Thu Thuy said in response to questions from Bloomberg News.
VinFast suffered losses of $1.5 billion in the first nine months of 2021, according to a filing with the U.S. Securities and Exchange Commission. The filing, submitted ahead of VinFast’s planned initial public offering, also indicated that the company expects to continue incurring net and operating losses in the near future.
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To support its operations, VinFast received support letters from its parent company, Vingroup, which stated its willingness and ability to provide financial support. However, the automaker will need significant additional capital, expected to come from debt and equity financing, as well as related-party financing.
VinFast had planned to start construction of its North Carolina plant in the U.S. in September 2021. The factory received praise from U.S. President Joe Biden, who called it a “latest example of my economic strategy at work.” However, construction was delayed, and VinFast has only now completed site clearance, with permits being finalized so that construction can begin.
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Despite the delay, the automaker still aims to start trial production at the North Carolina facility by 2024. The longer the construction is delayed, the longer it will take for VinFast to produce electric vehicles locally in North America and make its vehicles eligible for the Biden administration’s $7,500-a-car clean energy subsidy.
VinFast had planned to produce and ship its EVs from its factory in Haiphong, Vietnam, to the US by late 2022. However, the deliveries were delayed until the second half of February 2023 due to certification from the US Environmental Protection Agency (EPA) on the increased driving range of its model VF8. The model’s driving range has been improved to 207 miles (333 km), and the company has continued to update the software to enhance the user experience while awaiting certification.
VinFast’s US operations were recently affected by job cuts, including the departure of its US chief financial officer. However, the company assured that these changes would not affect its global operations. In November 2022, VinFast postponed the European launch of its VF8 and VF9 electric SUVs from the second half of 2022 to early 2023 due to a global semiconductor shortage.
See also: VinFast Merges Canadian and US Operations to Form VinFast North America for Greater Efficiency
VinFast aims to produce 1.1 million vehicles annually by 2026, but its current annual run rate is less than 20,000 units a year, with more than 4,900 EVs delivered in the three months through December 2022. The company has nearly 70,000 reservations to be produced and delivered to customers in the short term, with deposits accepted for VF5 and plans to open reservations for VF6 and VF7 globally soon. The expected delivery date for these models will start from the end of 2023.
