In an effort to shore up its finances, Vinfast Auto Ltd will spin off a portion of its R&D assets into a new company, which the automaker’s founder intends to purchase for around $1.5 billion. The move comes as the Vietnamese automaker faces yet another year of monetary hardships despite increasing revenue.
According to a report from Automotive News, the Vietnamese electric vehicle maker seeks to spin off part of its R&D assets to the newly formed Novatech Research and Development SJC. Novatech will arrive as a spin off of Vinfast Trading and Production JSC, but will remain a direct subsidiary of the automaker. The company has filed the move with the U.S. Securities and Exchange Commission as of this week. The newly formed company will essentially acquire the assets related to the costs of already completed R&D projects.
Vinfast Founder and CEO Pham Nhat Vuong is no stranger to spending money on his company. Vuong has spent well over $2 billion of his own capital in an effort to transform Vinfast into a global player in the automotive market. He’s even gone as far as to claim he’d support the automaker until he ran out of money. Vuong is currently the richest man in Vietnam, with a fortune estimated to sit at around $11.1 billion.
If things do not change for Vinfast soon, that situation might arise sooner than Vuong would hope. The company posted a $3.2 billion loss during 2024, and are on track to exceed those losses by the end of 2025. That comes despite the fact that Vinfast has increased vehicle deliveries and revenue through the current fiscal year. Struggles in the American and European markets do not help with those financial woes.
For now, hopefully this move allows the company to get things right on the books. What it means for the long-term will have to be seen.
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