VinFast secures a .4 billion loan from parent Vingroup, plus another .1B from its chairman

VinFast secures a $1.4 billion loan from parent Vingroup, plus another $2.1B from its chairman

Published

2 days ago

November 12, 2024

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Vietnamese EV automaker VinFast has just secured more funding to continue its operations. VinFast has been offered a loan for billions more from its parent company, Vingroup, including a $2.1 billion “sponsorship” from the Group’s chairman, Pham Nhat Vuong. All this is to achieve a break-even point and cash flow balance by the end of 2026.

As a young EV automaker out of Vietnam, VinFast remains the new kid on the block. To make a name for itself out of the gate, however, the automotive business entity under Vietnam’s largest conglomerate, Vingroup, came out absolutely sprinting off the starting line.

When we saw VinFast debut, it shared immediate plans for simultaneous market entries into the US and Europe, plus plans for an IPO, and several all-electric models entering production.

The “move fast and break stuff” strategy has worked for other new companies in the past, but part of that wreckage usually includes the bank. Scaling is not easy (or cheap), and at the rate VinFast has been moving, it’s even more expensive to do it so hastily.

According to a December 2022 filing with the SEC, VinFast reported whopping net losses of $1.3 billion in 2021 and $1.45 billion through September 30, 2022, with additional losses expected to incur “in the near term.”

In February 2023, Vingroup chairman Pham Nhat Vuong stated he had no intentions of investing any more of his personal money in the automaker. Vuong’s personal assets contributed to the initial $7.5 billion already allocated to VinFast from 2017-2022, alongside money from Vingroup and other lenders.

However, by April of that same year, VinFast received $500 million in nonrefundable grants from Vingroup. Furthermore, Vuong reversed his previous vow and offered the automaker another $1 billion in funding to keep going.

The automaker has since made more headway in global markets but has yet to become a household name. As such, VinFast has taken out another loan from Vingroup and additional funding from its chairman to keep it going through 2026.

VinFast accepts $1.4B loan from Vingroup plus more

VinFast shared news of its fresh round of funding this morning, which includes a loan of up to 35 trillion Vietnamese dong ($1.4 billion) from Vingroup by the end of 2026. Additionally, Chairman Vuong has personally pledged another 50 trillion dong ($2.1 billion) in sponsorship. The company stated that Vuong’s personal financial commitment will not impact the interests of Vingroup or its shareholders.

In a separate move, Vingroup will convert all existing loans, totaling approximately 80 trillion dong ($3.3 billion), to VinFast into dividend-entitled preferred shares. Per the release:

By converting loans to VinFast totaling about 80 trillion dong into preferred equity shares of VinFast Vietnam, Vingroup aims to alleviate short-term financial pressure on the electric vehicle maker. This move will allow Vingroup to maintain its stake in VinFast through dividend rights and the option to convert preferred shares into common shares of VinFast Vietnam Manufacturing and Trading Company or interests in VinFast Singapore.

VinFast shared that this loan and financial support plan aims to provide it with the necessary resources to fund operations, investments, and other obligations. Furthermore, Vingroup’s loan and sponsorship aim to help VinFast achieve the break-even point and cash flow balance by the end of 2026. A representative of Vingroup chairman Vuong’s office spoke about VinFast’s loan support strategy:

With the passion to create a world-class Vietnamese electric car brand, Mr. Pham Nhat Vuong will allocate significant resources to propel VinFast’s advancement. The newly secured funding source provides VinFast with the necessary financial resources to achieve sustainable growth without relying on external capital. This strategic move enables VinFast to prioritize research and development, production, and business expansion.

Despite having billions in loans and financial sponsorship lined up as a safety net, VinFast said it would continue to seek independent capital raises to meet its financial needs. The pledged funds from Vingroup and Chairman Vuong will be utilized only if those efforts are not successful.

Previous funds enabled VinFast to complete the construction of its 300,000-vehicle-per-year manufacturing plant in Cat Hai, Hai Phong, and the R&D of its entire BEV lineup. The company said it is now in a growth phase and has shifted its focus to “boosting sales across all markets and optimizing its cost structure.”

VinFast has delivered over 51,000 electric vehicles in Vietnam through the first ten months of 2024, but sales outside of its native country are going more slowly. Revenues are up, but delivery numbers are not where VinFast would like to be just yet.

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Beta Technologies founder completes first test flight in its production-intent eCTOL [Video]

Published

2 hours ago

November 14, 2024

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Beta Technologies founder completes first test flight in its production-intent eCTOL [Video]

All-electric aircraft developer BETA Technologies has shared another important milestone in bringing its first two vessels to market. Most recently, BETA’s founder, CEO, and test pilot Kyle Clark took the production version of its ALIA eCTOL up for its first flight, as seen in the video below.

BETA Technologies is a fully integrated electric aircraft and systems developer based in Vermont. Three years ago, it debuted its first electric vertical takeoff and landing (eVTOL) aircraft, the ALIA–250. That BETA vessel has since been renamed the ALIA VTOL and completed a piloted test flight transitioning mid-air this past April.

In addition to the ALIA VTOL, BETA has also been developing an electric conventional takeoff and landing (eCTOL) plane called the ALIA CTOL. To date, it has flown tens of thousands of test miles en route to evaluation flights for FAA certification. That aircraft is targeting full approval for commercial operations by 2025.

As BETA moves closer to bringing the ALIA CTOL to the public, it has completed its first bonafide production build in South Burlington. Following a Special Airworthiness Certificate from the Federal Aviation Administration (FAA), BETA has successfully taken its production-ready ALIA CTOL up for a test flight, piloted by its founder and CEO.

Watch BETA’s founder complete a CTOL test flight

BETA Technologies shared details of its first successful production CTOL test flight today alongside the images above and the full video below.

Once the production-intent build of the ALIA CTOL was complete, the FAA inspected the aircraft for safety and compliance before granting BETA a Multipurpose Special Airworthiness Certificate for Experimental Research & Development, Market Survey, and Crew Training, signing-off approval for test flights.

On November 13, BETA CEO, founder, and test pilot Kyle Clark conducted the first test flight of the ALIA CTOL aircraft, which lasted nearly an hour. The test included a conventional runway takeoff before the aircraft climbed to 7,000 feet.

While in the air, Clark tested the aircraft’s handling qualities, stability, control test points, and initial airspeed expansion before completing several approaches ahead of a normal landing. Clark spoke following the successful flight:

This start of our production CX300 flight test campaign is a result of years of hard work and focus on studying customer requirements, hard engineering, manufacturing, production, quality and test. It represents a significant milestone for BETA, and is the beginning of an exciting new phase for the business. With this, we’re one step closer to putting this technology into the hands of our customers.

We learned a lot from this first production build. We weren’t just building an aircraft company, we were building and refining a system to build high quality aircraft efficiently. This first build allowed the team to collect data and insight on manufacturing labor, tooling design, processes, yields and sequences, all of which are being used to refine our production systems.

With its production test flight campaign now underway, BETA says it will continue testing the ALIA CTOL aircraft for the standard 50 hours required before qualifying for a Market Survey and Crew Training certificate. That next certificate will enable BETA to fly outside of Burlington and Plattsburgh and continue training additional pilots on the aircraft.

The company shared it will also continue production of additional aircraft, including ALIA CTOL and ALIA VTOL configurations, the latter of which was recently teased in October. You can view footage of BETA’s CTOL flight below.

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U.S. crude oil rises, trades around $69 per barrel

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2 hours ago

November 14, 2024

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U.S. crude oil rises, trades around per barrel

Crude oil futures rose slightly on Thursday, with the U.S. benchmark trading around $69 per barrel, though the market outlook remains bearish.

Global crude supplies are expected to outstrip demand by more than 1 million barrels per day next year led by robust growth in the U.S., according to the International Energy Agency’s monthly market report.

Here are today’s energy prices by 8:07 a.m. ET:

West Texas Intermediate December contract: $68.92 per barrel, up 49 cents, or 0.7%. Year to date, U.S. crude oil is down more than 3%.
Brent January contract: $72.78 per barrel, up 50 cents, or 0.7%. Year to date, the global benchmark is down more than 5%.
RBOB Gasoline December contract: $1.9711 per gallon, up 0.3%. Year to date, gasoline has fallen nearly 6%.
Natural Gas December contract: $2.966 per thousand cubic feet, down 0.6%. Year to date, gas has gained nearly 18%.

UBS slashed its price forecast for global benchmark Brent to $80 per barrel from $87 previously on weakening demand in China, the world’s largest crude importer.

OPEC on Tuesday cut its demand growth forecast for the fourth month in a row earlier this week.

U.S. crude oil has shed about 4% and Brent is down 3.5% since Donald Trump won the U.S. presidential as the dollar has surged. A stronger U.S. dollar can depress oil demand among buyers that hold other currencies.

Don’t miss these energy insights from CNBC PRO:

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Loren McDonald stops by Quick Charge to discuss EV charging, Paren, and more

Published

13 hours ago

November 14, 2024

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Loren McDonald stops by Quick Charge to discuss EV charging, Paren, and more

Leading electric vehicle analyst, author, and industry thought leaders Loren McDonald and Bill Ferro stop by Quick Charge to discuss EV Adoption’s acquisition by Paren, the “crisis” of EV charging reliability, and the real state of the EV market.

Depending on who you listen, EVs are either driving brands to record growth and are about cross that critical 10% of the overall market nationwide, or the future is bleak, the market is down, and EVs just aren’t selling. What’s really going on? Loren and Bill (probably) have some answers.

Today’s episode is sponsored by BLUETTI, a leading provider of portable power stations, solar generators, and energy storage systems. For a limited time, save up to 52% during BLUETTI’s exclusive Black Friday sale, now through November 28, and be sure to use promo code BLUETTI5OFF for 5% off all power stations site wide. Click here to learn more.

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