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May 01, 2024
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The company’s CEO, who is also chairman of the board of its holding company, will make the investment from his personal fortune.
Vietnamese billionaire Pham Nhat Vuong has announced that he plans to invest $1 billion from his personal fortune into electric car maker VinFast. The announcement came during a shareholder meeting of Vingroup, the parent company of VinFast. Vuong is chairman of the board and he owns 18 percent of the company’s shares.
VinFast has been operating at a loss. As of Q4 2023, Vingroup had invested $11.4 billion in the EV maker. VinFast, which is traded on Nasdaq, has lost 75 percent of its share value since it’s offering in August 2023, when it began trading at $10; in the months since, the share price has dropped to $2.50.
The company has failed to meet sales targets, which has led to the losses. VinFast sold some 35,000 cars in 2023; of those, 70 percent went to taxi company GSM, which is owned by Vuong. Another 10 percent of the EVs VinFast sold went to units within Vingroup.
In addition to making EVs, VinFast also offers an e-bike, the Drgnfly. We can’t help but wonder if with this big cash infusion to VinFast Vuong will earmark some of that for the e-bike division. With just one model sold in VinFast’s showrooms, the company’s e-bike presence is thin. With such an enormous investment, the company would have the resources to expand production as well as develop new models, not to mention offer online sales.
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