For EV startups, it’s a challenging world. Many are battling to stay afloat as expenses soar, financing becomes more difficult to come by, and earnings remain elusive. However, VinFast, which is supported by Vingroup, the largest industrial conglomerate in Vietnam, appeared to be one of the few EV manufacturers that was not concerned about money, until now.
Vingroup is a company that produces cars as well as other things including real estate, hotels, software, retail, amusement parks, and education. VinFast was founded in 2017 by Pham Nhat Vuong, who also serves as chairman of the corporation.
Up until recently, Vingroup and Pham Nhat Vuong, a billionaire with a net worth of about $4.1 billion, provided financial backing to the company. However, Le Thi Thu, CEO of VinFast, claims that the chairman of Vingroup “has no plans” to invest his any more of his own capital into the company.
In September 2022, VinFast’s owners and lenders had invested almost $7.5 billion to cover operating expenses and capital investments. Even though the EV company is cutting its workforce and is behind schedule in creating a U.S. facility.
According to a December filing with the US Securities and Exchange Commission (SEC) in advance of VinFast’s anticipated first public offering, the company lost $1.3 billion in 2021 and nearly $1.5 billion in the first three quarters of 2022.
The company expects to continue to post operating and net losses in the near future, according to the filing. Vingroup, however, “has the ability and will continue to offer financial support adequate to satisfy our needs for continuous operation,” according to VinFast.
The petition states that related-party financing, debt, and equity financing, as well as equity financing, are expected to provide VinFast with the “substantial extra resources” it needs.
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