VinFast Powers Up With VinES Battery Maker Acquisition
In a VinFast factory in Haiphong, assembling battery packs. | Source: Shutterstock
VinFast, the electric vehicle (EV) manufacturer, is set to purchase a significant 99.8 percent share of VinES, a battery maker company. This move is part of VinFast’s strategy to enhance its role in the production process and gain a competitive edge.
VinFast, supported by Vietnam’s leading company, Vingroup, sees this acquisition of VinES, which is also part of the Vingroup family, as a way to ensure a steady supply of batteries for its EVs. This step is aimed at reducing battery costs by 5% to 7%.
VinFast, established in 2017 and commencing EV production in 2021, has been financially backed by its founder, who is also Vietnam’s wealthiest individual.
According to a filing with the US securities regulator, VinFast will acquire VinES without an initial payment, except for taking on an existing debt of approximately $462 million. The founder, Pham Nhat Vuong, has expressed willingness to support VinFast by covering interest payments on VinES’ existing debts until 2027.
Thuy Le, VinFast’s global CEO, stated, “The acquisition of VinES will enable VinFast to have better control over our battery technology and supply chain. This will lead to more efficient operating expenses and enhanced technology in our electric vehicles.”
In the short term, VinFast expects an increase in costs related to battery research and factory operations due to this acquisition. After the completion of the deal, VinFast will have full control over VinES’ assets and obligations.