Vietnam’s sole electric car manufacturer, VinFast, has received a significant boost as Vingroup Chairman Pham Nhat Vuong has donated 99.8% of his shares in VinES Energy Solutions Joint Stock Company to VinFast. This move is aimed at enhancing VinFast’s self-sufficiency in battery technology and production, allowing the company to gain a competitive edge in the rapidly growing electric vehicle market.
Merging to Enhance Battery Technology and Research
This merger will see VinES integrated into VinFast, further improving the company’s self-sufficiency in battery technology. By combining resources, VinFast will be better equipped to conduct battery research and development for its electric vehicles. VinES, a member company of Vingroup, specializes in advanced lithium-ion batteries for mobility and energy storage applications. With a legal capital of VND 6,500 billion ($270 million), the company not only manufactures batteries but also collaborates with leading global battery technology partners in its quest to become a comprehensive energy solution provider.
Acquisition of Battery Technology and Manufacturing Facilities
As part of the merger agreement, VinFast will gain access to all of VinES’ intellectual property related to battery cells, battery packs, manufacturing facilities, technology, partnerships, and supplier contracts. This acquisition of cutting-edge battery technology and modern manufacturing facilities is a crucial step towards establishing a fully integrated production chain for VinFast.
Unparalleled Competitive Advantage in the Electric Vehicle Market
This merger consolidates VinFast’s position in the global electric vehicle market, providing the company with an unparalleled competitive advantage. By gaining control over its battery technology and supply chain, VinFast can optimize its operating expenses while enriching the technology content of its electric vehicles.
Expansion Plans and Financial Support
In addition to the recent merger, Vingroup Chairman Pham Nhat Vuong has committed to donate $1 billion from his personal assets to VinFast. Furthermore, Vingroup and Vuong have announced a non-refundable grant of $500 million to VinFast and a guarantee for a $1 billion loan to support the company’s growth and global expansion plans.
The VinFast Battery Factory and Vietnam’s Growing Role in Battery Manufacturing
The VinFast battery factory, located in the Vung Ang Economic Zone in Vietnam’s Ha Tinh province, is a joint venture between VinFast and Gotion High-Tech, a Chinese battery manufacturer. With an initial capacity of 5 GWh per year, the factory is set to begin production in the third quarter of 2024. It will focus on producing lithium iron phosphate (LFP) battery cells, known for their affordability and long cycle life.
Vingroup has invested over VND 4 trillion ($174 million) to build the VinES battery factory in Ha Tinh. Now, the conglomerate plans to collaborate with Gotion Inc. for the development of a second battery factory in the province, with an investment of VND 6.3 trillion (approximately $274 million). This move reflects a trend of battery manufacturing shifting towards Vietnam, driven by the Vietnamese government’s support for the EV industry and the country’s low labor costs.
Lowering Costs and Advancing the EV Industry
The establishment of the VinFast battery factory contributes positively to Vietnam’s automotive industry and the global EV market at large. As battery manufacturing becomes more localized, there is potential for lower costs, making electric vehicles more accessible to consumers.
