Vietnam’s EV startup VinFast to acquire battery maker VinES from its founder two months after going public

Just two months after going public in a $23 billion SPAC merger deal, Vietnamese electric vehicle maker VinFast announced Wednesday. that it will acquire a 99.8% stake in the battery maker VinES from its founder, Pham Nhat Vuong. The move will enable VinFast to bolster its presence and competitiveness by enhancing its integration within the production value chain.

VinFast is a subsidiary of Vingroup, Vietnam’s largest conglomerate founded by Vietnam’s richest man Phạm Nhật Vượng. The 5-year-old startup has partnered with leading automotive industry giants, including LG Chem, Gotion, Pininfarina, and ZF. Besides, VinFast’s team consists of alumni from several top automakers, including BMW, General Motors, Toyota, Hyundai, Porsche, Jaguar-Land Rover, and Volkswagen, among others.

VinFast said that the strategic acquisition of VinES, which is also a part of the Vingroup ecosystem, serves the purpose of ensuring a stable battery supply, Reuters reported. This move is in line with VinFast’s objective to achieve a substantial 5% to 7% reduction in battery costs for their electric vehicles.

“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,” VinFast’s global chief executive Thuy Le said.

Founded in 2017 and commencing its electric vehicle (EV) production in 2021, VinFast has been consistently backed by its founder, who also happens to be Vietnam’s wealthiest individual.

According to a filing with the U.S. securities regulator, VinFast’s acquisition of VinES involves no financial consideration, except for taking on the debt, totaling about $462 million. Additionally, the founder, Vuong, has expressed willingness to offer grants to assist the EV manufacturer with all interest payments related to the existing VinES borrowings until 2027.

Vietnam’s transport sector currently contributes to a significant 18% of the country’s annual greenhouse gas emissions. Decarbonization efforts, which include options like electric mobility, are pivotal in Vietnam’s pursuit of achieving net-zero emissions by 2050.

VinFast, a subsidiary of Vingroup, Vietnam’s largest conglomerate, was founded by the nation’s wealthiest individual, Phạm Nhật Vượng. Despite being just a five-year-old startup, VinFast has managed to establish partnerships with prominent players in the automotive industry, such as LG Chem, Gotion, Pininfarina, and ZF. Furthermore, the VinFast team comprises alumni from various renowned automakers, including BMW, General Motors, Toyota, Hyundai, Porsche, Jaguar-Land Rover, and Volkswagen, among others.

Phạm Nhật Vượng, whose initial wealth was built in the dried ramen noodles business, is a Vietnamese property developer and the country’s first billionaire. He attended the Hanoi University of Mining and Geology before pursuing further studies in Russia at the Moscow Geological Prospecting Institute. Upon his return to Vietnam, he embarked on establishing Vingroup.

We previously featured VinFast last August when the EV tech startup announced its plans to hire an additional 8,000 employees to boost production and meet the growing demand for its electric vehicles.

Vingroup, founded 29 years ago on August 8, 1993, is a diversified company with interests spanning technology, industry, real estate development, retail, and services, covering sectors ranging from healthcare to hospitality. Four years ago, Vượng decided to start building and selling cars through the company’s automotive group called VinFast.