On March 1, 2023, VinFast electric vehicles were parked in a store in Los Angeles, waiting to be delivered to the first customers.
Lisa Butland | Reuters
Nasdaq-listed electric vehicle maker Wenfast said on Wednesday it would secure a new round of financing worth $3.35 billion from its founders and its parent company, Wen Group By 2026, it is expected to achieve breakeven.
VinFast began operations in 2019 and has been aggressively expanding into global markets, but losses have continued to mount as the company contends with weak demand and industry challenges.
About $1.97 billion of the new financing is expected to come from VinFast founder and tycoon Pham Nhat Vuong, according to a company statement.
Vingroup, one of Vietnam’s largest conglomerates, plans to lend VinFast up to $1.38 billion through its activities, dividends and possible divestments by the end of 2026, and said it may divest at an acceptable price if necessary .
In addition, Vingroup will convert all existing loans to VinFast Vietnam into preferred shares with dividend rights.
Vuong, who directly and indirectly owns 97.9% of VinFast shares, pledged during the shareholder meeting to increase investment in the automotive unit. General Assembly April.
VinFast said in a statement: “VinFast remains committed to raising independent capital to meet its financial needs. The support of Vingroup and Vuong will only be tapped if these independent efforts fail to meet requirements.”
Since its founding in 2017, VinFast has received a total of $13.5 billion in capital injections as of June this year from Vingroup, its affiliates and founder Vuong, according to a company filing in late October.
The new commitments will increase total funding to nearly $17 billion.
VinFast, which has North America as its main market, said it faces challenges marketing and selling electric vehicles in international markets outside of Vietnam.
The electric vehicle maker recorded a net loss of US$773.5 million from April to June, an increase of 27% from the first quarter, and a loss that was 40% larger than the same period last year. It expects further losses in the coming quarters.
July, VinFast suspended A $2 billion manufacturing complex project in North Carolina will be delayed until 2028 due to challenging market conditions.
Automakers are bracing for possible new U.S. tariffs on cars from other countries and the potential for President-elect Donald Trump to reverse existing policies supporting electric vehicles. report Reuters reports.
