DUBAI: VinFast, the Vietnamese electric vehicle manufacturer, has recently entered into a non-binding agreement with a consortium of UAE investors, led by Emirates Driving Company (EDC), to secure at least $1 billion in funding.
The development reflects the growing interest in the electric vehicle (EV) sector and the expanding economic ties between Vietnam and the United Arab Emirates.
While specific details regarding the timeline for the disbursement of these funds remain unclear, the memorandum of understanding signals a notable step for VinFast as it seeks to bolster its financial position amid recent challenges.
The EDC, which specialises in driving education services in Abu Dhabi, has yet to confirm its involvement, and VinFast’s parent company, Vingroup, has refrained from elaborating on the specifics of the investment.
Competitive EV market
VinFast’s financial performance has raised eyebrows, with the company reporting a net loss of $773.5 million for the April-June quarter of this year—an increase of 27 per cent from the prior quarter.
Despite these losses, VinFast achieved a significant milestone by delivering 21,912 electric vehicles in the third quarter, demonstrating a 66 per cent increase from the previous period.
Such growth is crucial for VinFast as it aims to carve out a presence in the competitive global EV market.
The move comes shortly after Vietnam and the UAE signed a comprehensive economic partnership agreement, marking Vietnam’s inaugural free-trade deal with a nation in the Middle East. This agreement may further enhance investment opportunities and facilitate the growth of Vietnamese businesses, including VinFast.
The potential investment from the Emirati consortium is particularly significant as VinFast continues to navigate its expansion on the international stage, having previously listed on the Nasdaq.
While the company announced that it had several strategic investors lined up, none have formally been identified to date, adding an element of uncertainty to its financial outlook.
