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VinFast Receives $2 Billion Cash Infusion From Its Founder

The VinFast VF 6 at the 2022 Los Angeles Auto Show | Photo: D.Boshouwers
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Daniel Rufiange
VinFast is set to open factories in India and Indonesia next year.

Typically for startups in the automotive industry, VinFast's financial situation is not very solid. The company is burning money at a frantic pace and profits are not yet there. As a result, it needs capital.

And it’s about to receive some, directly from the company’s founder. Pham Nhat Vuong has pledged to invest $2 billion USD in VinFast Auto, a sum taken from his personal fortune.

Parent company Vingroup has also committed to lending VinFast $1.38 billion. As well, Vingroup is converting its existing loans to VinFast Vietnam, totaling about 80 trillion dong ($3.3 billion USD), into dividend-paying preferred stock to ease short-term financial pressure on the electric vehicle maker, according to the statement. which was published by the company, reports Automotive News.

Pham Nhat Vuong and Vingroup have pledged to provide VinFast with additional investments and loans through 2026, if needed, according to the statement.

The gesture shows that the group is committed to the automotive division, the objective still being to make it a major player on the world stage. The challenge is significant, because the competition is very strong, especially from China, a market with which VinFast must deal.

The VinFast VF 8
The VinFast VF 8 | Photo: VinFast

VinFast's goal is to break even and have “balanced cash flow” by the end of 2026. The company also said it remains committed to raising capital from independent sources to meet its needs. “Support from Vingroup and Pham Nhat Vuong will only be used if these independent efforts are unsuccessful.”

The new loan from Vingroup will be financed by the many activities of the empire, which stretch into estate and retail sales.

Ultimately, VinFast wants to be present in some 50 foreign markets. Sales are not progressing at the expected rate at the moment, however, which is slowing the growth anticipated by the company’s executive.

The company plans to build a $4-billion factory in the United States, but the project, which should normally be nearing completion, has been delayed until 2028. A factory is due to open in India in the first half of next year, and another is to follow in Indonesia in July.

It’s clear the efforts are there. It's a safe bet that VinFast will succeed, but it’s far less certain whether that success will extend to North America.

Daniel Rufiange
Daniel Rufiange
Automotive expert
  • Over 17 years' experience as an automotive journalist
  • More than 75 test drives in the past year
  • Participation in over 250 new vehicle launches in the presence of the brand's technical specialists