VinFast tycoon to inject US$2bil into struggling EV maker

HO CHI MINH CITY: Vietnamese billionaire Pham Nhat Vuong pledged to invest about US$2 billion (RM8.9bil) into VinFast Auto Ltd., another major capital infusion from his personal wealth for the struggling electric vehicle maker.

Parent company Vingroup JSC also promised to loan VinFast as much as US$1.38 billion (RM6bil), according to a company statement.

Vingroup is also converting its existing loans to VinFast Vietnam, about 80 trillion dong (RM14bil), into preferred shares entitled to dividends to alleviate short-term financial pressure on the EV maker, according to the statement.

Vuong and Vingroup are committed to providing VinFast with additional investments and loans through 2026 if needed, the statement said.

It’s the latest sign of the company’s strong backing for the unit that aspires to be a global electric vehicle brand amid fierce competition from established automakers and fast-growing Chinese companies.

The goal is for VinFast to break even and have "cash flow equilibrium by the end of 2026,” the company said in the statement.

"However, VinFast remains committed to raising independent capital to meet its financial needs. The support from Vingroup and Mr Vuong will be utilized only if these independent efforts fall short.”

The new Vingroup loan will be funded by Vingroup’s business, dividends from subsidiaries, and divestments from investments and subsidiaries if needed, the statement said.

VinFast’s billionaire founder and chief executive officer Vuong said in an interview with Bloomberg TV in June that he was willing to bet all his money on the company’s growth. In April, he promised at least another US$1 billion cash infusion.

VinFast, which reported a wider loss in the second quarter of the year, has been bleeding cash since it shipped its first vehicles to the US in late 2022.

The company plans to sell vehicles in as many as 50 overseas markets. VinFast, though, is facing tough headwinds as a global EV slowdown has led auto giants to lower electric vehicle ambitions.

The EV maker expects to open an India factory in the first half of next year and broke ground on an assembly plant in Indonesia in July.

VinFast has delayed the opening of a factory in North Carolina by three years to 2028.

"VinFast is now in a growth phase, focused on boosting sales across all markets and optimising its cost structure,” the company said.