VinFast losses, already in the billions, worsen as NC-bound carmaker aims to go public

VinFast, the Vietnamese automaker building a massive assembly plant near the North Carolina Triangle, keeps burning cash.

On Thursday, the company reported it had lost more than $598 million in the first quarter of this year, as its revenue declined 49% from the same period last year. Overall, VinFast lost $2.1 billion in 2022 and $1.3 billion the year prior.

VinFast is a relatively new car company that has not begun to sell its electric vehicles on a mass scale globally. In December, the company shipped its first batch of SUVs to the United States, but those vehicles were later recalled due to safety concerns.

In its latest public filing to the U.S. Securities and Exchange Commission, VinFast expressed confidence in its financial resources. Since forming in 2017, the company, which is owned by the private conglomerate VinGroup, says it has spent $9.3 billion to fund its operations.

In April, VinFast secured a combined $2.5 billion in funding from its parent company and from VinGroup Chairman Pham Nhat Vuong personally. Vuong is the wealthiest person in Vietnam, and his many VinGroup subsidiaries are ubiquitous across the Southeast Asian country.

Such a connection gives VinFast an advantage over most other high-spending auto startups.

“We believe our ongoing relationship with Vingroup is a significant competitive advantage, most notably through shared expertise and software co-development among more than 1,100 engineers in the Vingroup ecosystem who collectively help produce differentiated technology for VinFast vehicles,” the company stated.

VinFast’s plans in Chatham

In its economic development agreement with North Carolina, VinFast has promised to spend $4 billion to build a new car and battery manufacturing facility in eastern Chatham County, on a megasite 30 miles southwest of Raleigh. The plant is the company’s first in North America.

The site is expected to create 7,500 jobs within the next five years. After initially scheduling the facility to open in 2024, VinFast now targets starting operations in 2025.

Between the state and Chatham County, VinFast is eligible to receive up to $1.25 billion in payroll tax rebates if it meets annual hiring and investment benchmarks. The North Carolina Geneneral Assembly has also pitched in millions to help cover upfront infrastructure costs at the site near the tiny town of Moncure.

SPAC deadline approaches

In its public filing Thursday, VinFast reiterated its hope to go public by merging with a special purpose acquisition company, or SPAC.

A SPAC, also known as blank check company, is a publicly traded shell company that serves as a vehicle for a private company to become public. Once the two companies merge, the private company gets a public listing. VinFast intends to combine with Black Spade Acquisition Co., a Hong Kong-based SPAC listed on the New York Stock Exchange.

The current deadline to complete the SPAC deal is July 20.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.

This story was originally published June 17, 2023, 9:26 AM.