Vietnamese billionaire Pham Nhat Vuong has announced plans to inject an additional $1 billion from his personal wealth into the Nasdaq-listed electric vehicle (EV) manufacturer VinFast Auto Ltd NASDAQ: VFS).
What Happened: At a shareholders' meeting of Vingroup, the conglomerate he chairs, Vuong, who directly owns 18% of its shares, expressed his intention to further bolster the investments in VinFast, which has been running at a loss, reported Reuters.
"I plan to give VinFast $1 billion from my own pocket," Vuong said.
He and Vingroup have already injected $11.4 billion into the company by the end of the previous year.
Vuong, who also serves as the CEO of VinFast, holds a 97% stake in the company through direct ownership and companies under his control.
Despite the company's stock price plummeting from $10 to $2.5 since its initial listing in August, Vuong remains optimistic about the EV market's future.
He stated, "The electric vehicle market will continue to grow, surpassing combustion engine cars. I will not give up on VinFast."
VinFast's sales challenges have been well-documented, with the company failing to meet its sales targets last year and reporting significant losses. The company's financial troubles have been exacerbated by its reliance on sales to associated companies and a declining global EV market.
Despite these challenges, Vuong remains committed to VinFast, with over 70% of the 35,000 cars sold last year going to an electric taxi company, GSM, which he owns. He is also considering listing GSM on the international market if conditions allow.
Why It Matters: The decision by Vuong to invest an additional $1 billion into VinFast comes at a time when the company is facing significant sales challenges. The company's financial troubles have been amplified by its dependency on sales to associated companies and a declining global EV market.
The company has accumulated losses of $5.7 billion over the past three years, leading to a 38% drop in Vingroup's share price since VinFast's U.S. listing in August.
Despite these challenges, Vuong's commitment to VinFast is unwavering, and his decision to invest an additional $1 billion demonstrates his confidence in the company's long-term prospects.
Back in August, VinFast's market cap skyrocketed with a 20% stock surge, securing the third position after Tesla and Toyota. The company's shares soared 20% in the U.S. market, pushing its market capitalization to $191.2 billion. Despite its U.S. operations not being fully operational, the EV boom prompted a buying frenzy among individual investors.
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