Vietnamese electric car maker VinFast plans to build factories in India and Indonesia and expects a $1.2 billion cash infusion from its founders and others as the company hopes to be in 50 markets by the end of 2024. VinFast also said that 10,027 electric vehicles were sold in the third quarter of 2023, slightly higher than the 9,535 vehicles in the second quarter, most of which were sold to founder Pham Nhat Vuong (Pan Riwang)’s taxi company.
Pham Nhat Vuong controls the majority of the 2.3 billion privately held VinFast shares. Securities filings show he will sell 46 million shares over the next six months to help raise the remaining $700 million or so he has pledged to the money-losing automaker. The company said it had given the company $291 million in September and that it expected to receive another $500 million from parent company Vingroup.
Last August, VinFast made history by becoming the only Vietnamese company listed in the United States. Analyst and former Yale University finance professor Owen Lamont said that the stock price subsequently experienced "weird price fluctuations." With less than 1% of VinFast's shares trading, its share price multiplied by Pham Nhat Vuong's much larger stake gave the company a particularly high valuation, at one point surpassing that of U.S. automaker Ford.
The securities filing said VinFast has optimized its "capital expenditure plan" for manufacturing, which will result in savings of $400 million, split roughly equally between the first phase of the two new plants. "These savings are expected to be used to build CKD plants in Indonesia, Southeast Asia's most populous country, and India, the world's third-largest auto market," the company said.
"CKD" refers to imported complete vehicles in knockdown form, which means VinFast will likely ship the cars from Hai Phong, Vietnam, and then assemble them in India and Indonesia. The company aims to produce 50,000 electric vehicles per factory per year, with production starting in 2026.
VinFast said in May that it would sell electric vehicles in Southeast Asia in addition to Europe and Canada. This year, the company became the first Vietnamese company to export cars to the United States, but the vehicles received poor industry reviews and the company recalled them over potential safety issues. Apart from this, the company also produces electric motorcycles and buses in Vietnam.
David Mansfield, VinFast's chief financial officer, said the company is "shifting to a capital-light distribution model," putting it on "a better path to profitability" while "taking a strong position in strategic markets such as Indonesia and India."