Vietnam's VinFast gets funding boost from parent, founder ahead of next year's India plans

A global EV demand slowdown has impacted VinFast, who has ambitions to expand to as many as 50 overseas markets, including India.

Vietnam's automotive company VinFast - which has ambitions to expand into India - recently got a major funding boost from parent entity Vingroup as well as Chairman Pham Nhat Vuong with a loan of $1.4 billion by the end of 2026, along with a pledge of $2.1 billion in sponsorship from the founder.

Vingroup also said it will convert all existing loans of about $3.3 billion to VinFast Vietnam into dividend-entitled preferred shares, a move that will help address the "short-term financial pressure" on the EV maker.

"The support plan is designed to provide VinFast with sufficient financial resources to fund operations, investments, and other obligations," VinFast said, adding that the move enables VinFast to "prioritize research and development, production, and business expansion."

VinFast had reported net loss in the second quarter and has been bleeding cash for near two years now. Now, the company aims to breakeven by 2026, and remains committed to "independently raising capital to meet its financial needs."

"The support from Vingroup and Mr. Vuong will be utilized only if these independent efforts do not reach the expectation," VinFast added. The EV maker said this support from the founder was made after the company became the top-selling car brand in Vietnam, and helps the "potential for future growth".

Read More: VinFast may launch locally-assembled EVs in India, advance TN plant opening

"To realize our vision of smart, eco-friendly electric vehicles, Vingroup will continue to invest significantly in VinFast. Our goal is to solidify VinFast’s market leadership in Vietnam and contribute to the global shift towards electric mobility," Nguyen Viet Quang, Vice Chairman of the Board and CEO of Vingroup said.

A global EV demand slowdown has impacted VinFast, who has ambitions to expand to as many as 50 overseas markets, including India. The company had signed a memorandum of understanding (MoU) in early 2024 with the Tamil Nadu government for an EV facility in Thoothukudi, with a planned investment of $2 billion.

VinFast currently offers seven electric car models in Vietnam ranging from mini-SUV to E-SUV across budgets.