VinFast’s founder will invest $1.52 billion USD to buy out the research and development (R&D) division of the Vietnamese EV maker. This new capital injection by Pham Nhat Vuong aims to support the loss-making company in its race towards profitability, which is planned for the end of 2026.
A strategic restructuring
The transaction, detailed in a filing with the U.S. Securities and Exchange Commission (SEC), stipulates that Novatech Research and Development JSC, an entity registered in Vietnam, will be separated from VinFast Trading and Production JSC (VFTP), the group's local manufacturing branch. Novatech will retain the investment costs related to completed R&D projects. For its part, VFTP will continue to lead EV production and future research projects in Vietnam.
The sale of Novatech shares to Vuong, valued at nearly 40 trillion dongs ($1.52 billion USD), includes a fair value assessment of 17.25 trillion dongs plus a premium. Novatech's intellectual property rights will be leased to VinFast for its production needs.
An automaker under pressure
First listed on the Nasdaq in 2023, VinFast has to contend with limited demand and strong competition. In the first quarter, the company recorded a net loss of $712.4 million USD, despite a 150-percent increase in revenue to $656.5 million USD.
Since its creation in 2017, VinFast has largely relied on the financial support of Vuong, who holds about 98 percent of the shares of the automaker and its parent company, Vingroup.
Ambitious goals for 2025
VinFast has already completed the development of its first generation of EVs. R&D expenses reached $81.2 million USD in the first quarter of 2025, a decrease of 22.3 percent compared to the previous year.
The company aims to deliver 200,000 vehicles in 2025, more than double what it managed in 2024, with the majority of sales occurring in the Vietnamese market.