Vietnam’s only electric car maker, VinFast, got a massive shot in the arm as Vingroup Chairman Pham Nhat Vuong donated 99.8% of his shares in VinES Energy Solutions Joint Stock Company to VinFast.
The merger is designed to further enhance the automaker’s self-sufficiency in the battery technology and production chain, while increasing its competitive edge in the ever-growing electric vehicle market.
VinES will be merged into VinFast to enhance its self-efficiency in battery technology and leverage resources to increase battery research and development for its vehicles.
A member company of Vingroup with legal capital of VND 6,500 billion ($270 million), the company specializes in researching, developing, and manufacturing advanced lithium-ion batteries for mobility and energy storage applications. VinES also cooperates with leading global battery technology partners and seeks to become a comprehensive energy solution provider. VinES specializes in researching, developing, and manufacturing advanced lithium-ion batteries for mobility and energy storage applications.
Under the terms of the merger, VinFast will acquire all of VinES’ intellectual property related to battery cells, battery packs, manufacturing facilities, technology, partnerships, and supplier contracts. This comprehensive acquisition of its battery technology and modern manufacturing facilities is an important step in completing the automaker’s fully integrated production chain.
The move creates an unparalleled competitive advantage for VinFast in the global electric vehicle market.
“The acquisition of VinES will help VinFast control our battery technology and supply chain, thus optimizing operating expenses and enriching technology content in our electric vehicles,” said Le Thi Thu Thuy, Vice Chairwoman of Vingroup and Global CEO of VinFast. “This is also an important step towards developing and controlling an integrated supply chain as well as comprehensive manufacturing system to further strengthen our competitiveness.”
In April 2023, Pham Nhat Vuong signed an agreement committing him to donate $1 billion from his personal assets to VinFast. Vingroup, together with Vuong, also announced the contribution of a further $500 million to VinFast in non-refundable grants, as well as a guarantee for a loan of $1 billion carrying a maximum tenor of five years to support VinFast’s growth and global expansion plans.
The VinFast battery factory in Vietnam is a joint venture between VinFast, a Vietnamese automotive company, and Gotion High-Tech, a Chinese battery manufacturer. The factory is located in the Vung Ang Economic Zone in the Ha Tinh province of Vietnam.
The factory is expected to start production in the third quarter of 2024 and will have an initial capacity of 5 GWh per year. The factory will produce lithium iron phosphate (LFP) battery cells, which is a type of lithium-ion battery that is known for its low cost and long cycle life.
In the middle of the pandemic in 2021, Vingroup invested more than VND4 trillion ($174 million) to build the VinES battery factory in Ha Tinh to produce battery packs and cells for VinFast EVs. The conglomerate said Monday it is cooperating with Gotion Inc. to develop its second battery factory in the central province with an investment of VND6.3 trillion (around $274 million).
The VinFast battery factory is part of a larger trend of battery manufacturing moving to Vietnam. Other companies, such as LG Chem and Samsung SDI, are also building battery factories in Vietnam. This trend is being driven by the Vietnamese government’s support for the EV industry and the country’s low labor costs.
The VinFast battery factory is a positive development for the Vietnamese automotive industry and the global EV industry. It will help to reduce the cost of EVs and make them more accessible to consumers.
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