Pham Nhat Vuong Ends Personal Investment in EV Startup
The founder of the Vietnam-based electric vehicle (EV) automaker, VinFast, and billionaire Pham Nhat Vuong has no intention to invest more of his own money in the company presently, at a period where each penny matters. As reported by Bloomberg, Vuong, who is valued at an approximated $4.1 billion, also acts as chairman of the Vingroup – a conglomerate that has engagements in real estate and even a university.
Vuong initiated the foundation of VinFast in 2017 and has already brought in the earliest editions of the VF 8 to America. All the same, VinFast is at present confronting some difficulties due to the EV-targeted financial battle inaugurated by Tesla. Traditional car manufacturing firms like Ford and Hyundai have already reacted by slicing down their electric vehicle costs, yet VinFast is positioned in a more difficult spot. Albeit this, Vuong appears undaunted.
“At present, CEO Le Thi Thu Thuy has confirmed that Mr. Vuong has no intentions of investing any more funds into VinFast himself,” said Thuy.
A recent report attests to the fact that, as of last September, owners and creditors had already put in a whopping amount of $7.5 billion into the startup. This might look like a substantial sum but, unfortunately, for 2021 the company incurred a deficit of $1.3 billion plus another one of nearly $1.5 billion in just the first nine months of 2022.
In December, VinFast filed an announcement with the U.S. Securities and Exchange Commission disclosing that before it can offer shares to the public through an initial public offering (IPO), further losses are likely.
Regrettably, this month saw the corporation having to downsize personnel in North America due to their financial predicament. One of the 80 roles cut was that of a Chief Financial Officer for the US market. Just the prior month, VinFast had revealed designs to coalesce their US and Canadian operations into a unit called VinFast North America, situated in Los Angeles, California.
The considerable sum of $4 billion has been budgeted for the assembly of a VF 8 and VF 9 production unit in North Carolina. The authorization to start construction is predicted to be given out shortly. While waiting, VinFast will persist to assemble its electric vehicles at its Vietnamese manufactory. The rollout of those two electric SUV models in Europe is anticipated to take place in the near future, bringing in some money, though not billions.
Lacking further funding from its billionaire creator, VinFast will be tasked with the difficult challenge of distributing their vehicles and satisfying all pre-orders.
Thuy stated that the firm “has delivered thousands of EVs and has nearly 70,000 reservations to be produced as soon as possible.” Clients may now put down deposits for the recently introduced VF 5, while order books for the VF 6 and VF 7 will open soon.
An impending Initial Public Offering is projected to secure much-needed extra resources for sustaining the vehicle manufacturer.