Vietnam-based electric vehicle maker VinFast, which is deemed as Tesla's rival, is set to aquire a 99.8% stake in battery maker VinES from its founder Pham Nhat Vuong to ramp up its integration in the production value chain and competitive advantage.
Filings from the U.S.Securities and Exchange Commission showed, VinFast would acquire VinES for no consideration other than assuming debt of around $462 million with Vuong willing to provide grants to the EV maker for all interest payments relating to existing VinES borrowings up to 2027.
VinFast, which was backed by Vietnam's largest conglomerate Vingroup, said the strategic acquisition of VinES, also a member in the Vingroup ecosystem, would help it save 5% to 7% on battery costs.
"The acquisition of VinES will help VinFast control our battery technology and supply chain, thus optimizing operating expenses and enriching technology content in our electric vehicles," said Thuy Le, VinFast's global chief executive.
Founded in 2017 and starting to make Vienam's first EVs VF e34 from 2021, VinFast has continuously received financial support from its founder, also Vietnam's richest man who helped exploring overseas markets vigorously. VinFast had its first U.S. deliveries in March 2023, and made a blockbuster debut on Nasdaq in August, but shares collapsed after that.
VinFast recorded $343 million in revenue for the three months ended Sept. 30, up 159% on the year. Its net loss widened 33.7% to $623 million. It has sold around 13,000 units in the second and third quarter this year, more than half of them to its affiliate.
But VinFast also indicated that is will open up seven more markets in Asia, includes India and Idonesia. VinFast plans to invest up to $200 million to set up assembly units and expects to commerce by 2026. It said, the establishment in these local markets can provide access to government incentives for local manufacturing, relief from certain tariffs and taxes and access to raw materials at attractive rates.