Pham Nhat Vuong has decided to refrain from pumping more of his own money into the EV startup.
The billionaire founder of startup Vietnamese EV automaker VinFast has no plans to personally invest more of his own money into the company at a time when every dollar counts. According to Bloomberg, Pham Nhat Vuong, who's worth an estimated $4.1 billion, is also chairman of the Vingroup, a conglomerate that also has dealings in real estate and even a university.
Vuong founded VinFast in 2017 and has already imported the first examples of the VF 8 to the US. However, VinFast is currently experiencing a few difficulties due to the Tesla-launched EV pricing war. Legacy automakers like Ford and Hyundai have already responded by dropping the prices of their respective EVs, but VinFast is in a much trickier situation. Vuong seems unfazed, however.
"Currently, Mr. Vuong has no plans" to personally invest further in VinFast, CEO Le Thi Thu Thuy confirmed.
The report further confirms that as of last September, the startup's owners and lenders have already invested about $7.5 billion. That may sound like a lot, but the company lost $1.3 billion in 2021 and nearly $1.5 billion in the first nine months of 2022.
VinFast reported in a US Securities and Exchange Commission filing in December it expects further losses before it plans to launch an initial public offering.
Unfortunately, the company was forced to slash jobs in North America earlier this month due to the cash crunch. One of the 80 positions eliminated was the US market chief financial officer. Last month, VinFast announced plans to consolidate its US and Canadian operations into a single entity called VinFast North America, headquartered in Los Angeles, California.
Another significant investment is the planned construction of a $4 billion manufacturing facility in North Carolina for the VF 8 and larger VF 9. Official approval to begin construction is expected soon. Until then, VinFast will continue to build its EVs at its factory in Vietnam. The European launch of those two EV SUVs is expected to get underway in the coming months, bringing in some money, but not billions.
Without further investment from its billionaire founder, VinFast must sell vehicles and keep up with reservations.
Thuy noted that the company has "delivered thousands of EVs and has nearly 70,000 reservations to be produced as soon as possible." Deposits for the recently revealed VF 5 are now being accepted, and order books for the VF 6 and VF 7 will open shortly.
The planned IPO should bring in much-needed additional funds to keep the automaker alive.
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