EV maker VinFast (VFS) just gained an edge. Vingroup Chairman and Vietnam’s richest person, Mr. Pham Nhat Vuong, announced Wednesday he would donate 99.8% of EV battery company VinES to VinFast.
Vingroup is Vietnam’s largest conglomerate, founded and owned by Mr. Pham. The company has a hand in everything from EVs and battery tech to golf courses and hospitals.
To accelerate growth, the billionaire has been injecting funds into VinFast, its electric vehicle and e-scooter company. Mr. Pham recently pledged to make $2.5 billion available for VinFast through loans and grants, with $1 billion in personal funding.
As other EV startups like Rivian, Lucid, Fisker, and others have found, expanding production and sales can be costly.
Despite rising EV sales, the company’s losses reached $622.9 million in the third quarter, up 20% from last year. However, VinFast has an advantage – a source of funding.
VinFast expects to receive $1.2 billion over the next six months as it expands into new markets. The company received another gift Wednesday as Vuong donated VinES, Vingroup’s battery company, to VinFast.
VinFast VF 9 electric SUV (Source: VinFast)
VinFast merges with EV battery company VinES
Vingroup’s chairman announced he will donate 99.8% of VinES Energy Solutions shares to VinFast.
VinES is another company under the Vingroup umbrella that focuses on researching, building, and manufacturing lithium-ion batteries. The company has in-house R&D, manufacturing, testing, and validation capacity.
Established in 2021, VinES is developing batteries for electric vehicles, power tools, energy storage, and other mobility uses like e-scooters.
VinES global presence (Source: VinES)
The battery company is based in Vietnam but has a presence in the US, Canada, the UK, Korea, Taiwan, and more.
The move will help VinFast improve battery production and development time with the ability to leverage resources.
Through the business merger, VinFast expects to save at least 5% to 7% on battery costs. The company will borrow $462 million to finance the acquisition, which Vuong has agreed to provide interest-free grants to help cover.
VinFast headquarters (Source: VinFast)
Under the terms, VinFast will acquire all VinES intellectual property for battery cells, battery packs, manufacturing facilities, technology, partnerships, and supplier contracts.
The agreement is a big first step as VinFast looks to compete globally with a fully integrated production chain.
Electrek’s Take
Securing battery resources is one of the most critical factors for future EV growth, and automakers are racing to lock up their supply.
With a 99.8% donation, VinFast just got a gift. The company will take on $462 million in interest-free debt, but in return, it will gain access to all of VinES IP rights and global network.
VinFast reiterated its target of delivering between 40,00 and 50,000 EVs this year. Through the first nine months, the company has delivered 21,342. Most have been sold to Green and Smart Mobility (GSM), another Vingroup company.
Keyword: VinFast gets donated EV battery company from Chairman