Vingroup Chairman, Pham Nhat Vuong, has declared his intention to donate a staggering 99.8 percent of shares from VinES Energy Solutions Joint Stock Company to VinFast.
Why It Matters
The purpose behind this substantial donation is to boost VinFast’s autonomy in battery technology and its production chain. As the electric vehicle sector continues to expand, this move will be crucial in increasing VinFast’s competitive standing.
Key Points
- VinES Integration: Post-donation, VinES will be integrated into VinFast to fortify its proficiency in battery technology. This integration will also promote augmented research and development for vehicle batteries.
- About VinES: With a legal capital of VND 6,500 billion ($270 million), VinES is a Vingroup subsidiary that primarily focuses on the R&D and production of advanced lithium-ion batteries. The company also collaborates with top-tier global battery tech partners.
- Merger Details: The company will inherit all of VinES’ intellectual assets encompassing battery cells, battery packs, technology, facilities, collaborations, and supplier agreements. This acquisition will solidify VinFast’s end-to-end production chain, offering a distinctive edge in the worldwide EV market.
- Statement from Vingroup: Le Thi Thu Thuy, Vingroup’s Vice Chairwoman and VinFast’s Global CEO, remarked that the VinES takeover will allow VinFast to dominate their battery technology and supply chain. This move aligns with their ambition to bolster their competitive position by having a thorough control over the integrated supply chain and comprehensive manufacturing systems.
- Earlier Commitments: In April 2023, Vuong had already pledged to donate $1 billion from his personal funds to VinFast. Additionally, both Vingroup and Vuong announced a joint contribution of $500 million in non-refundable grants and guaranteed a loan of $1 billion, with a tenure cap of five years, to fuel VinFast’s growth and international outreach.
Bottom Line
By merging VinES into VinFast, Vingroup is positioning the latter to be a formidable player in the electric vehicle sector. With enhanced battery tech prowess and substantial financial backing, the company is poised for significant global expansion.
