Vietnamese billionaire Pham Nhat Vuong, CEO of VinFast, has announced plans for $1 billion investment from his wealth into the electric vehicle (EV) company, signaling a significant boost in confidence and resources for the Vietnam-based manufacturer.
This move comes as the company is ramping up its production capabilities to meet the growing global demand for electric vehicles, positioning itself as a key player in the competitive EV market.
A Continued Investment Journey
This new pledge follows a substantial $11.4 billion investment from Vuong and Vingroup in VinFast, marking a continued effort to support the EV company despite its operational losses.
“I plan to give VinFast $1 billion from my own pocket,” Vuong stated, without specifying a timeline for the fund transfer. Owning a 97% stake in the company, Vuong’s investment reflects his confidence in the electric vehicle market’s growth potential.
“The electric vehicle market will continue to grow, surpassing combustion engine cars. I will not give up on VinFast,” he added.
Market Challenges and Strategic Sales
VinFast’s share price has faced significant challenges since its initial public offering in August, plummeting to $2.5 from the initial $10. This downturn is reflective of the company’s struggle to meet sales targets, having sold only 35,000 vehicles in 2022.
Notably, over 70% of these sales were to GSM, an electric taxi company also under Vuong’s ownership, with an additional 10% to Vingroup affiliates.
Expansion and Diversification Plans
With GSM making strides in the Vietnamese ride-hailing market, Vuong hinted at potential plans for an international listing, contingent on favorable market conditions.
Furthermore, Vingroup is exploring a 2023 listing for its hospitality arm, Vinpearl, showcasing a strategic diversification in its business operations.
Last month marked a significant transaction for Vingroup, with the sale of a $1.6 billion stake and assets in Vincom Retail, a major revenue generator for the group. Despite the real estate sector’s turbulence, Vinhomes, its real estate subsidiary, continues to report profitability.
Financial Stability and Future Outlook
Wrapping up his address to shareholders, Vuong reassured them of Vingroup’s robust liquidity. “Vingroup has no cash flow problems,” he declared, instilling confidence in the conglomerate’s financial health and strategic direction.
This latest billion investment underscores the unwavering commitment of the CEO to VinFast and the broader vision for a sustainable automotive future.
Image Source: The Wall Street Journal
