Vingroup’s chairman gifts VinES to Vinfast in EV merger

: Battery materials
23/10/12

Vietnamese conglomerate Vingroup's chairman Pham Nhat Vuong announced that he is gifting 99.8pc of Vietnamese battery manufacturer VinES Energy Solutions to Nasdaq-listed electric vehicle (EV) manufacturer Vinfast Auto, as the latter transitions into being a more fully integrated company.

Vinfast in its 11 October filing with the US Securities and Exchange Commission (SEC) disclosed that it would acquire VinES from Pham for no consideration, except assuming around $462mn of debt. Pham will provide grants to VinFast for all interest payments relating to these existing borrowings up to 2027. Vinfast will acquire all rights and obligations over VinES' assets, it said.

The consolidation will in the long term enhance Vinfast's battery supply chain security, cut its EV battery costs by 5-7pc and strengthen its battery technologies' research and development (R&D), the firm said on 11 October. But the firm is expecting a rise in costs in the short term for its battery R&D and factory operations.

Vinfast was valued at $23bn, according to a June filing with the US SEC. It listed on the US Nasdaq stock exchange in August after completing a merger with US-listed special purpose acquisition firm Black Spade Acquisition. It delivered 10,027 EVs during July-September, up from 9,535 units in April-June and 153 for July-September 2022.

Vinfast in July started building its $2bn US EV factory in North Carolina's Chatham county. The factory has a planned phase 1 capacity of 150,000 units/yr that will begin producing in 2025, which may be further expanded to 250,000 units/yr in a second phase. The firm received a $1.2bn incentive package from North Carolina state, it said.

The firm in its latest quarterly financial report said it is planning to build multiple EV assembly plants in Indonesia and India but did not disclose the number of factories it plans to set up. Each will have a planned capacity of up to 50,000 unit/yr and an estimated capital expenditure of $150-200mn in a first phase. Production is expected to start by 2026.

VinES earlier this month agreed to jointly explore developing a battery anode material project with Australian graphite developer Ecograf in Vietnam.

By Joseph Ho

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