It's a tough world out there for electric vehicle startups since most are struggling to keep afloat as costs are skyrocketing, funding is harder than ever to come by, and profits remain a distant dream.
But VinFast appeared to be one of the few EV makers that did not have financial worries, being backed by Vietnam's largest industrial conglomerate, Vingroup.
Besides the car making operation, Vingroup is involved in technology, software, real estate, hospitality, retail, leisure parks, and education. The conglomerate is run by billionaire Pham Nhat Vuong, who also founded VinFast in 2017.
Up until now, the automaker has been funded both by Vingroup and Pham Nhat Vuong personally – he is worth around $4.1 billion. That is about to end, however, as VinFast CEO Le Thi Thu Thuy told Bloomberg.
She said Vingroup's chairman currently "has no plans" yet to personally invest any more money in VinFast, despite the fact the EV maker is falling behind on US factory construction plans and is cutting staff.
As of September, VinFast's owners and lenders had invested about $7.5 billion to fund its operating expenses and capital expenditures.
Gallery: First Batch Of VinFast VF8 Electric SUVs Arrives In US
VinFast lost $1.3 billion in 2021 and close to $1.5 billion in the first three quarters of 2022, according to a December filing with the US Securities and Exchange Commission (SEC) ahead of VinFast's planned initial public offering.
The filing also said the company expects to continue to sustain operating and net losses in the near term. However, VinFast also said parent company Vingroup "has the ability and will continue to provide financial support sufficient to meet our needs for continued operation."
According to the filing, the "significant additional capital" required by VinFast is expected to come via debt and equity financing and related-party financing.
VinFast was supposed to start construction of its planned North Carolina plant in September 2022, but CEO Le Thi Thu Thuy said last week the factory has "basically completed the site clearance" and the company is "finalizing the permits so construction can commence."
She added that VinFast remains on track to start trial production at the North Carolina facility by 2024. Until then, the automaker has to import EVs from its factory in Haiphong, Vietnam. The company is facing delays on that front as well, with US deliveries of its first batch of vehicles pushed back from late 2022 to the second half of February 2023.
According to Thuy, the delay is caused by the fact VinFast is awaiting certification from the EPA on the increase of the VF 8 EV's driving range, which is now 207 miles (333 km). Earlier this month, VinFast reportedly cut approximately 80 jobs in North America, including its US chief financial officer, Rodney Hayes.