Vingroup grants VinFast $1.4 billion loan as losses continue

Vietnam’s leading EV manufacturer, VinFast, secured a loan totaling 35 trillion Vietnamese dong ($1.4 billion) from its parent company, Vingroup.

A Vingroup representative stated that the funding aims to “alleviate short-term financial pressure” on the EV maker and to equip it with “the necessary financial resources to achieve sustainable growth without relying on external capital.” Vingroup is also converting an existing 80 trillion dong ($3.1 billion) loan to VinFast into dividend-entitled preferred shares.

Furthermore, Pham Nhat Vuong, Vietnam’s richest man and Vingroup’s founder, pledged a sponsorship of 50 trillion dong ($1.9 billion) to support the EV maker.

VinFast, which is yet to turn a profit since its 2017 founding, reported a net loss of $772 million in Q2 2024, exceeding last year’s loss of $525.8 million. Vingroup said the loan will only be accessed if VinFast’s efforts to raise external capital fall short of their goals. The company aims to reach a break-even point and cash flow equilibrium by 2026. Despite its losses, VinFast remains Vietnam’s top-selling car brand, with over 11,000 EVs delivered in October and a total of more than 51,000 units delivered to date.