VinFast Auto Seeks 99.8% Stake in Leading Battery Maker VinES

VinFast Auto revealed plans today to acquire a significant 99.8% stake in battery producer VinES, marking a strategic move in its integrated production roadmap.

Securing Battery Supply for Enhanced Efficiency

With this strategic acquisition, VinFast aims to ensure a stable supply of batteries for its expanding lineup of electric vehicles, allowing the company to streamline its operations and reduce costs by 5% to 7%, Reuters reported. VinES, part of the Vingroup ecosystem, will be crucial in meeting VinFast's battery requirements and supporting its ambitious growth plans.

"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.

Since its establishment in 2017, VinFast has received consistent financial support from its founder, Pham Nhat Vuong, who is also Vietnam's richest individual. The Times of India noted that this backing has enabled VinFast to establish itself as a key player in the EV industry, providing innovative and sustainable mobility solutions.

VinFast's Acquisition Approach, Future Prospects

In a filing with the U.S. securities regulator, VinFast outlined the terms of the acquisition. The company will assume the debt of approximately $462 million, with Vuong offering to provide grants for all interest payments related to the existing VinES borrowings until 2027.

This acquisition will pave the way for VinFast to fully control VinES' assets, ensuring a seamless and efficient battery supply chain.

Although VinFast anticipates an immediate increase in costs pertaining to battery research and development and factory operations, the company remains committed to long-term efficiency gains. VinFast has announced plans to establish kit assembly plants in Indonesia, known for its abundant nickel resources.

This move will enable VinFast to leverage the availability of this crucial material for battery production, thus strengthening its future competitiveness.

Financial Performance, Market Standing

VinFast's debut on the Nasdaq earlier this year marked a significant milestone for the company. With $343 million in revenue for the three months ended September 30, an impressive 159% increase from the previous year, VinFast's growth trajectory is evident.

However, the company also reported a wet loss of 33.7% to $623 million during the same period. VinFast sold over 13,000 units in the second and third quarters, with over half being acquired by its affiliate. As news of the acquisition broke, VinFast's shares showed a slight uptick of 0.53%, reaching $7.53 each by 1411 GMT.

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