(Reuters) – Nasdaq-listed electric vehicle maker VinFast said on Wednesday it will get a new funding round worth 85 trillion dong ($3.35 billion) from its founder and parent company Vingroup by 2026, when it expects to break even.
VinFast began operations in 2019 and has aggressively expanded into global markets, but the company continues to report mounting losses as it grapples with weaker demand and industry challenges.
About 50 trillion dong ($1.97 billion) of the new funding is expected to come from VinFast founder tycoon Pham Nhat Vuong, according to a company statement.
Vingroup, one of Vietnam’s largest conglomerates, plans to lend up to $1.38 billion to VinFast by the end of 2026 through its operations, dividends and possible divestments, which it says can be carried out at an acceptable price if necessary.
In addition, Vingroup will convert all existing loans to VinFast Vietnam into preference shares with dividend rights.
Vuong, who owns 97.9% of VinFast shares both directly and indirectly, assured his commitment to increasing investment in the automotive division during a general meeting in April.
“VinFast remains committed to raising independent capital to meet its financial needs. The support of Vingroup and Vuong will only be used if these independent efforts fall short,” VinFast said in the statement.
Since its founding in 2017 through June this year, VinFast has received capital injections totaling $13.5 billion from Vingroup, its subsidiaries and founder Vuong, according to a company filing in late October.
The new commitments would boost total funding to nearly $17 billion.
VinFast, which has North America as its main market, has said it faces challenges in marketing and selling its electric vehicles in international markets outside Vietnam.
The EV maker posted a net loss of $773.5 million in the April-June period, up 27% from the first quarter and a loss 40% bigger than the same period last year. It expects further losses in the coming quarters.
In July, VinFast suspended its $2 billion manufacturing complex project in North Carolina until 2028 due to challenging market conditions.
Automakers are preparing for possible new U.S. tariffs on vehicles from other countries and a possible reversal of existing pro-electric vehicle policies under newly elected President Donald Trump, as reported by Reuters.
($1 = 25,340.0000 dong)
(Reporting by Phuong Nguyen and Francesco Guarascio; Editing by Martin Petty)
