EV maker VinFast to acquire its battery maker sibling
ELECTRIC-VEHICLE maker VinFast Auto said on Wednesday (Oct 11) it would acquire a 99.8 per cent stake in battery maker VinES from its founder Pham Nhat Vuong as it seeks to ramp up its integration in the production value chain and competitive advantage.
VinFast, which was backed by Vietnam’s largest conglomerate Vingroup, said the strategic acquisition of VinES, also a member in the Vingroup ecosystem, would help it secure the supply of batteries as the EV maker sought to save 5 per cent to 7 per cent on battery costs.
Founded in 2017 and starting to make EVs from 2021, VinFast has continuously received financial support from its founder, also Vietnam’s richest man.
In a filing with the US securities regulator, VinFast said it would acquire VinES for no consideration other than assuming debt of around US$462 million with Vuong willing to provide grants to the EV maker for all interest payments relating to existing VinES borrowings up to 2027.
“The acquisition of VinES will help VinFast control our battery technology and supply chain, thus optimising operating expenses and enriching technology content in our electric vehicles,” said Thuy Le, VinFast’s global chief executive.
In the short term, however, VinFast’s costs are expected to increase for battery R&D and factory operations, the automaker said. After the acquisition, VinFast will acquire all rights and obligations over VinES’ assets.
VinFast, which made its Nasdaq debut in August, plans to set up kit assembly plants in nickel-rich Indonesia, with plans to bring VinES along to take advantage of the material to produce battery, Thuy Le told analysts last month.
The automaker recorded US$343 million in revenue for the three months ended Sep 30, up 159 per cent on the year. Its net loss widened 33.7 per cent to US$623 million. It has sold around 13,000 units in the second and third quarter this year, more than half of them to its affiliate.
Shares in VinFast were up 0.53 per cent at US$7.53 each by 1411 GMT. REUTERS
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