F-1 1 d621047df1.htm FORM F-1 Form F-1
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As filed with the Securities and Exchange Commission on October 23, 2023.

Registration No. 333-  

 

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

VinFast Auto Ltd.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

 

 

 

Singapore   3711   Not Applicable

(State or other jurisdiction of

incorporation or organization)

  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

Dinh Vu – Cat Hai Economic Zone

Cat Hai Islands, Cat Hai Town, Cat Hai District

Hai Phong City, Vietnam

+84 225 3969999

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, NY 10168

+1 (212) 947-7200

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

Sharon Lau

Stacey Wong

Latham & Watkins LLP

9 Raffles Place

#42-02 Republic Plaza

Singapore 048619

+65 6536 1161

 

 

Approximate date of commencement of proposed sale to the public:

as soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

   


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion, Dated    , 2023.

Preliminary Prospectus

 

 

VinFast Auto Ltd.

100,800,000 Ordinary Shares

 

 

This prospectus relates to the offer and sale, from time to time, by YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”), of up to 100,800,000 ordinary shares in the capital of VinFast Auto Ltd., a public company incorporated under the laws of Singapore (Company Registration No: 201501874G) (“we,” “us,” the “Company” or “VinFast”), no par value (“ordinary shares”), including (i) up to 100,000,000 ordinary shares that we may, at our discretion, elect to issue to Yorkville from time to time after the date of this prospectus, pursuant to the Standby Equity Subscription Agreement, dated as of October 20, 2023, entered into by and between Yorkville and the Company (the “Yorkville Subscription Agreement”) and (ii) 800,000 ordinary shares (the “Commitment Shares”) to be issued to Yorkville as consideration for its irrevocable commitment to subscribe for ordinary shares at our direction, from time to time after the date of this prospectus, upon the terms and subject to the conditions set forth in the Yorkville Subscription Agreement. See “Committed Equity Financing” for a description of the Yorkville Subscription Agreement and “Selling Securityholder” for additional information regarding Yorkville.

Under the Yorkville Subscription Agreement, we have the right, but not the obligation, to issue to Yorkville, and Yorkville has the obligation to subscribe for, ordinary shares for an aggregate subscription amount of up to $1.0 billion (the “Commitment Amount”), at any time from the date of the Yorkville Subscription Agreement until November 1, 2026, unless earlier terminated pursuant to the Yorkville Subscription Agreement (the “Commitment Period”), subject to certain conditions. We do not have the right to require Yorkville to subscribe for any ordinary shares under the Yorkville Subscription Agreement until the date on which all of the conditions to Yorkville’s subscription obligation set forth in the Yorkville Subscription Agreement have been satisfied, including that the registration statement of which this prospectus forms a part be declared effective by the SEC and the final form of this prospectus is filed with the SEC. From and after such date, we will have the right, but not the obligation, from time to time at our discretion during the Commitment Period, to require Yorkville to subscribe for a specified amount of ordinary shares (each such issuance, an “Advance”) by delivering written notice to Yorkville (each, an “Advance Notice”).

Under applicable rules of the Nasdaq Stock Market LLC (“Nasdaq”) and the Yorkville Subscription Agreement, in no event may we issue to Yorkville ordinary shares that would result in the number of our ordinary shares issued under the Yorkville Subscription Agreement exceeding 466,212,650 ordinary shares (the “Exchange Cap”), being 19.99% of our ordinary shares issued as of October 19, 2023, unless (a) we obtain shareholder approval to issue ordinary shares in excess of the Exchange Cap or (b) the average price of all applicable issuances of ordinary shares hereunder (including the 800,000 Commitment Shares of our ordinary shares issued for these purposes) equals or exceeds $5.69 (being the reference price under Nasdaq Rules) per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the Yorkville Subscription Agreement; or (ii) the average Nasdaq Official Closing Price of our ordinary shares (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the Yorkville Subscription Agreement). In any event, we may not issue any ordinary shares under the Yorkville Subscription Agreement if such issuance would breach any applicable Nasdaq listing rules.

The Yorkville Subscription Agreement does not obligate Yorkville to subscribe for or acquire any ordinary shares under the Yorkville Subscription Agreement if those ordinary shares, when aggregated with all other ordinary shares acquired by Yorkville under the Yorkville Subscription Agreement, would result in Yorkville beneficially owning more than 4.99% of the then outstanding ordinary shares (the “Beneficial Ownership Cap”).

 

   

 


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Each ordinary share to be issued to Yorkville from time to time under the Yorkville Subscription Agreement will be issued at 97.5% of the Market Price, as defined in the Yorkville Subscription Agreement. “Market Price” is defined as the lowest of the daily volume weighted average prices (“VWAP”) during the three consecutive trading days commencing on the advance notice date (“Pricing Period”), other than the daily VWAP on any day excluded pursuant to the terms of the Yorkville Subscription Agreement. With respect to each Advance, if VinFast notifies Yorkville of a minimum acceptable price with respect to such Advance, then if the VWAP of the ordinary shares is below the minimum acceptable price indicated by VinFast or if there is no VWAP, there will be an automatic reduction to the amount of the Advance by one third, and that day will be excluded from the Pricing Period. The total number of ordinary shares to be issued to Yorkville in respect of each Advance with any excluded days will be increased by such number of ordinary shares equal to the greater of the number of ordinary shares, if any, sold by Yorkville on such excluded days or such number of ordinary shares that Yorkville elects to subscribe for, in each case, at a subscription price per ordinary share equal to 97.5% of the minimum acceptable price, subject to the limitations set forth in the Yorkville Subscription Agreement.

We may not have access to the full $1.0 billion Commitment Amount available under the Yorkville Subscription Agreement due to the reasons noted above. See “Committed Equity Financing” for more information regarding the Yorkville Subscription Agreement.

We are not selling any of our ordinary shares under this prospectus, and we will not receive any of the proceeds from the sale of our ordinary shares by Yorkville. We will bear all costs, expenses and fees in connection with the registration of the ordinary shares. Yorkville will bear all commissions and discounts, if any, attributable to sales of the ordinary shares registered herein. We are registering these our ordinary shares for resale by Yorkville pursuant to the registration rights granted to Yorkville under the Yorkville Subscription Agreement. See “Selling Securityholder” for more information.

As of the date of this prospectus, we are unable to estimate the actual amount of proceeds that we may receive under the Yorkville Subscription Agreement, as it will depend on a number of factors, including the frequency and prices at which we issue ordinary shares to Yorkville, market conditions and the trading price of our ordinary shares, our ability to meet the conditions set forth in the Yorkville Subscription Agreement, and determinations by us as to the appropriate sources of funding for our company and our operations.

Yorkville is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”), and any profits on the sales of shares of our ordinary shares by Yorkville and any discounts, commissions, or concessions received by Yorkville are deemed to be underwriting discounts and commissions under the Securities Act.

Our registration of the securities covered by this prospectus does not mean that Yorkville will offer or sell any of the ordinary shares. Yorkville may offer and sell the securities covered by this prospectus in a number of different ways and at varying prices. See “Plan of Distribution” for more information. The market price of our ordinary shares could decline if Yorkville sells a significant portion of our ordinary shares or is perceived by the market as intending to sell them. See “Risk Factors — Risks Relating to this Offering — The issuance of our ordinary shares to Yorkville will cause dilution to our existing shareholders, and the sale of the ordinary shares acquired by Yorkville, or the perception that such sales may occur, could cause the price of our ordinary shares to fall” and “Risk Factors — Risks Relating to this Offering — Investors who buy ordinary shares at different times will likely pay different prices.” If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in any applicable prospectus supplement. See the sections of this prospectus titled “About this Prospectus” and “Plan of Distribution” for more information. No securities may be sold without delivery of this prospectus and any applicable prospectus supplement describing the method and terms of the offering of such securities. You should carefully read this prospectus and any applicable prospectus supplement before you invest in our securities.

Our ordinary shares and warrants are listed on the Nasdaq under the symbols, “VFS” and “VFSWW.” We had 2,332,229,366 ordinary shares outstanding as of October 19, 2023 and 3,321,002 warrants outstanding as of October 19, 2023. On October 19, 2023, the last reported sale price of our ordinary shares as reported on Nasdaq was $5.69 per ordinary share. On October 19, 2023, the last reported sale price of our warrants as reported on Nasdaq was $0.81 per warrant.


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We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.

We are both an “emerging growth company” and a “foreign private issuer” as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements. See “Prospectus Summary—Implication of Being a Foreign Private Issuer” and “Prospectus Summary—Implication of Being an Emerging Growth Company.”

 

 

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 33 of this prospectus for a discussion of information that should be considered in connection with an investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

Prospectus dated    , 2023.


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TABLE OF CONTENTS

 

     Page  

ABOUT THIS PROSPECTUS

     ii  

MARKET AND INDUSTRY DATA

     iii  

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

     v  

PROSPECTUS SUMMARY

     1  

THE OFFERING

     29  

SUMMARY CONSOLIDATED FINANCIAL DATA

     30  

RISK FACTORS

     33  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     76  

COMMITTED EQUITY FINANCING

     78  

USE OF PROCEEDS

     83  

DIVIDEND POLICY

     84  

CAPITALIZATION

     85  

ENFORCEABILITY OF CIVIL LIABILITIES

     86  

CORPORATE HISTORY AND STRUCTURE

     88  

SELECTED CONSOLIDATED FINANCIAL DATA

     91  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     107  

BUSINESS

     138  

REGULATION

     178  

MANAGEMENT

     194  

PRINCIPAL SHAREHOLDERS

     202  

SELLING SECURITYHOLDER

     204  

RELATED PARTY TRANSACTIONS

     205  

DESCRIPTION OF SHARE CAPITAL

     218  

DESCRIPTION OF CERTAIN INDEBTEDNESS

     244  

TAXATION

     250  

PLAN OF DISTRIBUTION

     258  

EXPENSES RELATED TO THIS OFFERING

     259  

LEGAL MATTERS

     260  

EXPERTS

     261  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

     262  

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

     F-1  

PART II INFORMATION NOT REQUIRED IN PROSPECTUS

     II-1  

 

 

You should rely only on the information contained in this prospectus or any supplement. Neither we nor Yorkville have authorized anyone else to provide you with different information. The securities offered by this prospectus are being offered only in jurisdictions where the offer is permitted. You should not assume that the information in this prospectus or any supplement is accurate as of any date other than the date on the front of each document. Our business, financial condition, results of operations and prospects may have changed since that date.

Except as otherwise set forth in this prospectus, neither we nor Yorkville have taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States.

 

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ABOUT THIS PROSPECTUS

Except where the context otherwise requires or where otherwise indicated, the terms “VinFast,” the “Company,” the “Group,” “we,” “us,” “our,” “our company,” and “our business” refer to VinFast Auto Ltd. and, where appropriate, its consolidated subsidiaries.

References to “Vingroup” are to Vingroup Joint Stock Company, a public company listed on the Ho Chi Minh Stock Exchange, Vietnam. References to “VIG” are to Vietnam Investment Group Joint Stock Company and references to “Asian Star” are to Asian Star Trading & Investment Pte. Ltd. References to the “Company Selling Securityholders” are to Asian Star and VIG. References to the “Company Initial Shareholders” are to Vingroup, Asian Star and VIG.

On August 14, 2023, VinFast announced the completion of the previously announced business combination (the “Business Combination”) with Black Spade Acquisition Co, a Cayman Islands exempted company (“Black Spade” or “BSAQ”), pursuant to the business combination agreement, dated as of May 12, 2023, by and among the Company, Black Spade, and Nuevo Tech Limited, a Cayman Islands exempted company and wholly owned subsidiary of the Company (“Merger Sub”) (as amended from time to time, the “Business Combination Agreement”). In connection with, and prior to, the Business Combination: (i) on July 31, 2023, VinFast converted from a Singapore private limited company operating under the name “VinFast Auto Pte. Ltd.” into a Singapore public limited company operating under the name “VinFast Auto Ltd.”; and (ii) on August 1, 2023, VinFast effected a share consolidation such that the number of issued and outstanding ordinary shares was reduced from 2,412,852,458 ordinary shares to 2,299,999,998 ordinary shares.

Pursuant to the terms of the Business Combination Agreement, among other things, the following transactions occurred: (i) on August 11, 2023, Merger Sub merged with and into Black Spade, with Black Spade surviving the merger as a wholly-owned subsidiary of VinFast, (ii) on August 14, 2023, each issued and outstanding Class B ordinary share of Black Spade, par value $0.0001 per share and each issued and outstanding Class A ordinary share of Black Spade, par value $0.0001 per share (other than BSAQ Class A ordinary shares that were treasury shares, validly redeemed shares, or BSAQ dissenting shares) were converted into one VinFast ordinary share, and (iii) VinFast, Black Spade and Continental Stock Transfer & Trust Company (“Continental”) entered into an assignment, assumption, amendment agreement (the “Warrant Assumption Agreement”) dated as of August 11, 2023, and on August 14, 2023, each issued and outstanding warrant of Black Spade sold to the public and to Black Spade Sponsor LLC, a limited liability company registered under the laws of the Cayman Islands (“Sponsor”), in a private placement in connection with Black Spade’s initial public offering were exchanged for a corresponding warrant exercisable for VinFast ordinary shares.

Pursuant to the terms of the Sponsor Support and Lock-Up Agreement and Deed, dated as of May 12, 2023, as amended by the First Amendment to Sponsor Support and Lock-Up Agreement, dated as of June 14, 2023, by and among the Company, the Sponsor and certain initial shareholders of Black Spade and the backstop subscription agreement, dated as of August 10, 2023, by and among the Company, Sponsor and Lucky Life Limited (the “Backstop Subscriber”), on August 14, 2023, VinFast issued to the Backstop Subscriber 1,636,797 ordinary shares for $10.00 per share for an aggregate purchase price of $16.4 million (the “Backstop Subscription”).

On June 30, 2023, the Company entered into the Gotion Subscription Agreement an ordinary shares subscription agreement with Gotion Inc. (“Gotion”) pursuant to which Gotion will subscribe for 15,000,000 ordinary shares at $10 per share for an aggregate subscription price of $150 million. As of September 20, 2023, 15,000,000 ordinary shares were issued to Gotion.

Although certain of our shareholders are subject to restrictions regarding the transfer of their securities, these shares may be sold after the expiration of the applicable lock up periods or the release from such lock up periods. On September 20, 2023, we released 46,293,461 ordinary shares in aggregate, which may be offered and

 

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sold from time to time, by the Company Selling Securityholders from the lock-up restrictions under the VinFast Shareholders Support Agreement (as defined herein) (the “VinFast Parties Lock-Up Release” and those ordinary shares to which such lock-up release relates, the “Released Shares”). Our affiliate, Vingroup, waived its right to an equivalent release from its lock-up restrictions under the VinFast Shareholders Support Agreement. As of October 19, 2023, there were 43,771,153 Released Shares outstanding. The 43,771,153 Released Shares outstanding represent 1.9% of our outstanding ordinary shares and 1.9% of the ordinary shares that the Company Initial Shareholders own in aggregate as of October 19, 2023. Excluding the 43,771,153 Released Shares outstanding, the Company Initial Shareholders own an aggregate of 2,253,706,537 ordinary shares, representing 96.6% of our outstanding ordinary shares as of October 19, 2023, that have not been registered for sale and remain subject to lock-up restrictions under the VinFast Shareholders Support Agreement. In connection with the VinFast Parties Lock-Up Release, (i) 4,225,000 ordinary shares in aggregate held by the Black Spade Initial Shareholders and their permitted transferees have been released from lock-up restrictions, (ii) the Sponsor and the Backstop Subscriber waived their rights to the release of the Private Warrants Shares and the Backstop Shares from the lock-up restrictions under the Sponsor Support Agreement and the Backstop Subscription Agreement, respectively, and (iii) we reduced the lock-up period applicable to the Private Warrants Shares and the Backstop Shares under the Sponsor Support Agreement and the Backstop Subscription Agreement, respectively, from 12 months after the closing of the Business Combination to six months after the closing of the Business Combination. In addition, in connection with the VinFast Parties Lock-Up Release, Gotion waived its right to an equivalent release from its lock-up restrictions under the Gotion Subscription Agreement.

A registration statement on Form F-1 (File No. 333-274475) that registers the resale of ordinary shares by, among others, the Sponsor, certain directors, officers and advisory committee members of Black Spade and certain employees of the Sponsor’s affiliates, the Company Selling Securityholders (including the Released Shares) and Gotion was declared effective by the Securities and Exchange Commission (“SEC”) on October 2, 2023 (“First Resale Registration Statement”).

References to “VND” are to Vietnamese dong, the legal currency of Vietnam. References to “$,” “U.S. dollars” and “USD” are to United States dollars, the legal currency of the United States. Unless otherwise noted, all translations from VND to U.S. dollars in this prospectus are made at a rate of VND23,800 to $1.00, which represents the central exchange rate quoted by The State Bank of Vietnam Operations Centre as of June 30, 2023 (other than with respect to any financial information as of September 30, 2023, for which translations from VND to U.S. dollars in this prospectus are made at a rate of VND24,089 to $1.00, which represents the central exchange rate quoted by The State Bank of Vietnam Operations Centre as of September 30, 2023). We make no representation that any VND or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or VND, as the case may be, at any particular rate, or at all. Certain amounts shown in this prospectus or derived from the U.S. GAAP financial statements have been rounded or truncated as deemed appropriate by the management of VinFast. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them.

MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this prospectus concerning our industry and the regions in which we operate, including our general expectations and market position, market opportunity, market share and other management estimates, is based on information obtained from various independent publicly available sources and other industry publications, surveys and forecasts. While we believe that the market data, industry forecasts and similar information included in this prospectus are generally reliable, such information is inherently imprecise. In addition, assumptions and estimates of our future performance and growth objectives and the future performance of our industry and the markets in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under the headings “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus.

 

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Information contained in this prospectus concerning our industry, market and competitive position data in this prospectus from our own internal estimates and research as well as from publicly available information, industry and general publications and research, surveys and studies conducted by third parties.

Industry publications and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but such information is inherently imprecise. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. These forecasts and forward-looking information are subject to uncertainty and risk due to a variety of factors, including those described under “Risk Factors.” These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

 

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

The financial information in this prospectus as of December 31, 2021 and 2022 and for the years then ended and as of June 30, 2023 and for the six months ended June 30, 2022 and 2023 has been derived from the consolidated financial statements of VinFast Auto Ltd., which are included elsewhere in this prospectus. The consolidated financial statements of VinFast Auto Ltd. are prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”).

In January 2022, we announced our strategic decision to cease internal combustion engine (“ICE”) vehicle production to transform into a pure-play manufacturer of electric vehicles (“EVs”). In early November 2022, we fully phased out production of ICE vehicles and completed the ICE Assets Disposal (as defined herein) to our shareholder, VIG. Notwithstanding our cessation of ICE vehicle production in early November 2022, our results of operations presented in this prospectus primarily reflect the historical results of our ICE vehicle manufacturing business and our gradual cessation of our ICE vehicle manufacturing during 2022. Accordingly, our results of operations and comparative financial information presented in this prospectus may not be indicative of our results of operations expected for any future period.

The unaudited pro forma consolidated financial information in this prospectus gives pro forma effect to the phase-out of our ICE vehicle production, the consummation of the Business Combination and the other transactions contemplated by the business combination agreement, dated as of May 12, 2023, by and among the Company, Black Spade, and Nuevo Tech Limited, a Cayman Islands exempted company and wholly owned subsidiary of the Company (“Merger Sub”) (the “Original Business Combination Agreement”) as amended by the First Amendment to Business Combination Agreement, dated as of June 14, 2023 (the “First Amendment to Business Combination Agreement” and, together with the Original Business Combination Agreement, the “Business Combination Agreement”) and the Gotion Investment, as further described in “Unaudited Pro Forma Condensed Combined Financial Information.” The unaudited pro forma consolidated financial information in this prospectus is qualified in its entirety by reference to, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Corporate History and Structure,” the consolidated financial statements and related notes included elsewhere in this prospectus. The unaudited pro forma consolidated financial information includes various estimates that are subject to material change and may not be indicative of what our results of operations or financial position would have been had such events taken place on the dates indicated, or of our results of operations expected for any future period. Certain amounts shown in this prospectus or derived from the U.S. GAAP financial statements have been rounded or truncated as deemed appropriate by the management of our company. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them.

Information in this prospectus regarding driving range is presented in both Worldwide Harmonised Light Vehicles Test Procedure (“WLTP”) and Environmental Protection Agency (“EPA”) terms, which are U.S. and international emissions standards. All WLTP driving range data with respect to our current and future vehicles presented in this prospectus are based on internal estimates or targets. Actual ranges or certified ranges may differ materially from our estimated or targeted range and from estimated and certified ranges prepared using other methodologies. For example, estimated and certified WLTP ranges may differ materially from estimated and certified EPA ranges. WLTP ranges are often, but not always, longer than EPA ranges. In addition, in all cases, actual driving ranges may vary from internal estimates and certified ranges for various reasons, including driving patterns and conditions, how an EV is maintained and other external factors.

In order to identify customers with immediate demand for our EVs and to enable us to optimize our production plans, we initiated programs in April, May and June 2023 to convert existing EV reservations into firm orders and existing firm orders into purchases. Customers in Vietnam with reservations were required to register for a vehicle delivery time during the year but no later than December 31, 2023 and pay an additional deposit. Customers in Vietnam with firm orders were required to pay the full purchase price for their EVs or increase their deposits to 20% of the contract values. In both cases, customers can cancel their firm orders/reservations and return any promotional

 

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vouchers in their possession in exchange for a refund equal to 120% of the deposit they had placed. Our EV reservations data in this prospectus reflects the results of the April, May and June conversion programs, as well as the conversion of reservations into deliveries in the ordinary course of business. Information regarding the number of our EV reservations in this prospectus is not comparable to our EV reservation data in the public domain and may not be comparable to our EV reservation data that we may publish in the future.

 

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our ordinary shares discussed under “Risk Factors.”

Who We Are

We are VinFast, and our goal is to be a leader in the future of Smart Mobility through our intelligent, thoughtful and inclusive EV platform. We aim to foster a cleaner and more sustainable approach to 21st century mobility that is evolutionary and revolutionary.

We are bold, decisive and eager to advance our product and platform.

We aim to constantly push boundaries in our approach to technology, service innovation, customer engagement and manufacturing excellence, all for the sake of delivering an exceptional customer experience.

Our mission is to help create a more sustainable future for all. We aim to help sustain our planet by accelerating the switch to electric vehicles with an inclusive, premium product line and unique service platform. We envision a world where a top-tier electric vehicle-driving experience is accessible to all. We have already begun delivering on that vision today with our line of all-electric sports utility vehicles (“SUVs”), readying us for the new era of VinFast, one focused on global expansion and creating a sustainable future.

At VinFast, our motto is “boundless together.” It is representative of the adventurous and inspired feeling we want our drivers to experience every time they take the wheel, a precept of our approach to manufacturing, an affirmation of our limitless desire to reach new heights with the products we create, our effort to build a sustainable future and our enthusiastic re-shaping of the electric vehicle driver experience. In that spirit, we are breaking boundaries by focusing on the future, setting out on new journeys as one team (maker, driver, partners) and sharing the VinFast vision along the way. We are constantly innovating from a technology and driver experience perspective and are ready to push forward towards a sustainable future. With that said, we recognize that we cannot do this alone, and we urge those who share this desire to unite with us on our journey to a brighter and greener future.

Come join the charge with us.

Our Business

We are an innovative, full-scale mobility platform focused primarily on designing and manufacturing premium EVs, electric scooters (“e-scooters”) and electric buses (“e-buses”). Our initial EV product line is an all-new range of fully-electric A- through E-segment SUVs, the first of which began production in December 2021. We focus strategically and exclusively on EVs and fully phased out production of ICE vehicles in 2022 in order to execute on our vision of creating an e-mobility ecosystem built around customers, community and connectivity alongside our new vehicle roll-out. We plan to deliver on this strategy by leveraging our manufacturing expertise and strong track record of producing ICE vehicles and e-scooters. We started producing e-scooters in 2018, passenger cars (ICE vehicles) in 2019 and e-buses in 2020. We have delivered approximately 105,000 vehicles (primarily ICE vehicles) and approximately 182,000 e-scooters through the end of June 2023. Innovation is at the heart of everything we do. We focus on achieving operational efficiency and technological integration, and we seek to continuously improve our processes to deliver world-class products.

 

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We plan to begin selling our electric SUVs in key global markets in 2023. Our initial target markets are the U.S. and Canada in North America and France, Germany and the Netherlands in Europe. We will also continue to target our existing market in Vietnam. We see these geographies as material to our strategy, with significant momentum and positive forces driving the switch to EVs across vehicle segments. Specifically, we believe the A- through E- electric SUV segments will lead the EV revolution and drive profitable growth in the near and long term across the automotive market. While we are currently focused on these segments, we continue to evaluate the full spectrum of vehicle types for future product development. We believe our vehicles are differentiated, especially across the emerging EV space, through our premium-quality product offering, including advanced technology and new-mobility features for our drivers, a fashionable and luxurious design, and our comprehensive Smart Services solution. We expect to remain competitive by focusing on SUVs, the most popular consumer vehicle segment, and including in our products top tier technology and luxurious outfitting that is not standard for similar vehicles at our price points. We strongly believe in the future of Smart Mobility and strive to provide the VinFast platform as an access point to that future.

Our VF 8 (D-segment) and VF 9 (E-segment) models are our first electric SUVs to be offered in North America and Europe. Since we introduced these models at the Los Angeles Auto Show in November 2021, they have been showcased at the International Electric Vehicle Symposium, Consumer Electronics Show, New York Auto Show, Paris Motor Show, Montreal Auto Show and Canadian International Auto Show. We currently offer two trims of the VF 8 and VF 9: Eco and Plus. The Eco trim offers a longer driving range than the Plus trim with standard features. The Plus trim offers higher horsepower and luxury features including a panoramic glass roof, leathered upholstery, a power-assisted tailgate and captain’s chairs for the second row. We began U.S. deliveries of the VF 8 in March 2023 from our initial U.S. shipment of 999 VF 8 “City Edition” vehicles in both Eco and Plus trims. The “City Edition” was our first version of the VF 8 to go through the relevant testing and approval processes in the U.S. and therefore completed those processes and was available for delivery sooner than the VF 8 (87.7 kWh battery). We offered a $3,000 discount on the VF 8 “City Edition” to select customers who had made reservations for the VF 8 in the U.S. The “City Edition” is also available on a 36-month lease basis for California residents only. Customers were given the option to receive the “City Edition” at the discounted price or maintain their existing reservation for the VF 8 (87.7 kWh battery). Certain customers who opted to take delivery of the VF 8 “City Edition” may be eligible for the VinFast Lease Forward Program after 12 months of leasing, and subject to the terms and conditions of the program, would be able to exchange their VF 8 “City Edition” for the VF 8 (87.7 kWh battery) with equivalent trim. The Lease Forward Program ended in September 2023. We have no plans for future offerings of the VF 8 “City Edition” in North America or Europe but will continue to offer this VF 8 “standard driving range” option in Vietnam. In April 2023, we dispatched a shipment of approximately 1,900 VF 8 (87.7 kWh battery) that use battery components that provide a longer driving range than the VF 8 “City Edition,” and we began delivering the VF 8 vehicles from this shipment to North American customers in the second half of 2023. Deliveries in Europe are expected to begin in the second half of 2023. We plan to deliver the VF 9 in North America in 2023 and in Europe in 2024. As of August 31, 2023, we had approximately 17,000 reservations for the VF 8 and VF 9 globally (of which approximately 10,000 reservations are in the U.S.).

We commenced delivery of the VF 5 (A-segment) model in Vietnam in April 2023. The VF 5 is our electric SUV for the Vietnam market that offers dynamic youthful styling, targeting first-time, budget conscious buyers. We received approximately 3,300 reservations in the first nine hours of introducing the VF 5 in Vietnam in December 2022. At the 2023 CES, we unveiled our forthcoming VF 6 (B-segment) and VF 7 (C-segment) models. The VF 6 is our electric SUV for the family-oriented driver. The VF 7 is our driver centric electric SUV, accentuated by its futuristic styling. First deliveries of the VF 6 and the VF 7 are targeted for 2023 and 2024, respectively. In June 2023, we introduced our forthcoming VF 3, which is a mini car specifically designed for the Vietnam market. The VF 3 is planned to feature a 2-door design and seating for up to five people, with integrated basic smart features. We plan to offer the VF 3 in Eco and Plus trims. We target to commence deliveries in late 2024.

 

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We have achieved a great deal in our short history. Following the founding of our company in 2017, we achieved start of production of our first ICE vehicle in only 21 months. As a new entrant and the first Vietnamese automotive original equipment manufacturer (“OEM”), we have partnered with top-tier global companies, including Steyr Fahrzeugtechnik AG & Co KG (“Magna”), Tata Technologies and Pininfarina S.p.A. (“Pininfarina”) to accelerate the integration of industry best practices into our processes. Deliveries of our first fully-electric SUV, the VF e34, began in Vietnam in December 2021, deliveries of the VF 8 began in Vietnam in September 2022 and in the U.S. in March 2023, and deliveries of the VF 9 and the VF 5 began in Vietnam in March and April 2023, respectively. As of June 30, 2023, we sold approximately 18,700 EVs (consisting of approximately 9,000 VF e34s and 7,500 VF 8s, other models and ebuses) mostly in Vietnam. In the second quarter of 2023, we sold approximately 9,500 EVs, consisting of approximately 4,200 VF e34s, 3,400 VF 8s, other models and ebuses. As of August 31, 2023, we had reservations for approximately 18,000 VF e34, VF 5, VF 8 and VF 9 EVs globally. Approximately 30% of the reservations had non-refundable reservation fees and the remainder were cancellable reservations with a nominal amount of refundable reservation fees. First deliveries of the VF 6 are targeted for 2023 and first deliveries of the VF 7 and the VF 3 are targeted for 2024. See “Risk Factors—Risks Relating to Our Business and Industry—Our long-term results depend upon our ability to successfully introduce and market new products and services, which may expose us to new and increased challenges and risks.”

We quickly established significant brand recognition in Vietnam and within 18 months from product launch, we gained the leading market share in Vietnam for each of our product segments, based on management’s analysis of publicly available data. This share was acquired from the incumbent global vehicle brands from Asia, Europe and North America that have historically dominated the Vietnamese market prior to our arrival. Since our establishment, we have gained significant experience in manufacturing at scale, which has helped us swiftly incorporate EVs into our existing assembly lines. Like other entities within the Vingroup family of companies, turning early-stage businesses into market leaders through top-tier execution and leadership is a hallmark of our approach to business.

We are a majority-owned affiliate of Vingroup, one of the largest companies listed on the Ho Chi Minh Stock Exchange with a combined market capitalization of approximately $21.0 billion as of June 30, 2023 across Vingroup and all of its listed subsidiaries, which together contributed 1.1% to Vietnam’s GDP in 2022 based on their 2022 consolidated revenue. Led by our Chairman, Pham Nhat Vuong (our “Chairman”), Vingroup is the largest conglomerate in Vietnam with market-leading, fast-growing businesses that span the industrials, technology, real estate and social services sectors in Vietnam. Vingroup has a nearly 30-year operating history and strong track record of improving the daily lives of consumers through applied technology. As of September 30, 2023, approximately $10.7 billion has been deployed to fund operating expenses and capital expenditures of VinFast since 2017 by Vingroup, its affiliates and external lenders. In addition, we have entered into the Capital Funding Agreement (as defined herein) with our Chairman, Mr. Pham Nhat Vuong and the Company Initial Shareholders that provides a framework for us to receive up to VND60,000.0 billion (approximately $2.5 billion), consisting of VND24,000.0 billion ($996.3 million) in grants from our Chairman, Mr. Pham Nhat Vuong, directly or through the Company Selling Securityholders, as well as up to VND24,000 billion ($996.3 million) in loans and up to VND12,000.0 billion ($498.2 million) in grants from Vingroup by April 2024, in amounts to be mutually agreed, at such time as required by us and subject to our Chairman and the Company Initial Shareholders having sufficient financial resources. As of September 30, 2023, Mr. Pham Nhat Vuong has disbursed an aggregate amount of VND7,000 billion ($290.6 million) to VinFast as a free grant and Vingroup has disbursed approximately VND23,000 billion ($954.8 million) in loans to VinFast in accordance with the Capital Funding Agreement. We will receive all of the proceeds from any sales of up to 46,293,461 Released Shares by the Company Selling Securityholders pursuant to the First Resale Registration Statement, net of any sales commissions, fees, brokerages, taxes and other related expenses. Such proceeds will be provided to us by the Company Selling Securityholders in relation to the Capital Funding Agreement. If the aggregate sum of such proceeds and the VND7,000 billion ($290.6 million) grant from Mr. Pham Nhat Vuong exceeds VND24,000.0 billion ($996.3 million), any additional

 

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proceeds from such sales by the Company Selling Securityholders will be provided to us as a further grant from the Company Selling Securityholders to us. We expect to receive an aggregate amount of up to VND29,000 billion (approximately $1.2 billion) in grants from Vingroup and the Company Selling Securityholders by April 2024. We believe our ongoing relationship with Vingroup is a significant competitive advantage, most notably through shared expertise and software co-development among more than 1,200 engineers in the Vingroup ecosystem who collectively help produce differentiated technology for VinFast vehicles.

Technology is at the core of our platform, and we have invested significantly in our group technology platform to provide the safest, most driver-friendly experience possible for our drivers—what we refer to as “technology for life.” We believe vehicle technology should be convenient and fully integrated into our drivers’ day-to-day lives. “Connecting intelligence globally” is a cornerstone of our growth plan: our research and development (“R&D”) and product innovations differentiate the VinFast EV experience on the world stage with premium features, including infotainment, driver assist, ADAS and other enhancements expected in a top-end EV ownership experience, which are available in all of our vehicles. As of June 30, 2023, the VinFast R&D team includes more than 930 in-house professionals (including approximately 130 software engineers) and leverages the expertise of engineers and developers across the related technology companies within the Vingroup ecosystem. We also encourage our technical teams and R&D leads to partner with leading global experts to undertake product development projects when doing so is more time and cost efficient than in-house R&D. Notwithstanding multiple partners participating throughout the value chain, the product rollout and intellectual property underlying each individual system is created, managed and/or mastered by our internal team of engineers and technology professionals. We have collaborated with cutting-edge technology companies to leverage our existing core competencies, including collaborations with NVIDIA, Mobileye, BlackBerry, Erae AMS (“Erae”), Quanta Computer Inc. (“Quanta”), and Vector Informatik GmbH (“Vector”) on our ADAS, Aptiv, AVL List GmbH (“AVL”) and FEV on certain components of our powertrain and battery, Amazon Alexa for our Virtual Assistant and T-Mobile on our smart infotainment. In October 2022, we also entered into a memorandum of understanding (“MOU”) with Contemporary Amperex Technology Co., Limited (“CATL”) to collaborate in the development and production of CATL integrated intelligent chassis (“CIIC”) skateboard chassis products that integrate battery packs, electric motors and other core systems and components of an EV into a single layer at the bottom of the vehicle, with the goal of reducing manufacturing costs, vehicle weight and energy consumption and maximizing cabin space. Similarly, we source our battery components from a variety of suppliers including Gotion, Samsung SDI and CATL. We currently have a strategic partnership with VinES Energy Solutions Joint Stock Company (“VinES”), a subsidiary of Vingroup, intended to cover the full spectrum of battery R&D, manufacturing, testing, performance and cost optimization and battery recycling once VinES fully ramps up its operations. On October 11, 2023, we announced that we intend to acquire 99.8% of VinES to enable us to control our own battery technology and achieve greater integration in our production value chain. The proposed acquisition of VinES is intended to provide additional security to our battery supply, improve our battery cost optimization and expand our access to external partners for the latest battery technologies. VinES plans to be a fully integrated battery cell and pack manufacturer and is developing its own battery cell technology and battery cell production capabilities in Vietnam. We believe our current partnership with, and our proposed acquisition of, VinES reduces uncertainties associated with reliance on unrelated third parties. VinES has completed the construction of and has begun operating their battery pack assembly facility in Ha Tinh, Vietnam which expands its battery pack production capabilities beyond its existing facilities in Hai Phong, Vietnam. VinES is also developing a second lithium cell facility in Ha Tinh, Vietnam, in collaboration with Gotion. In March 2023, VinES entered into a collaboration agreement with StoreDot to develop extreme fast charge (“XFC”) battery cells in different form-factors, in preparation for mass production and supply.

VinES has sought to partner with suppliers of raw materials used in the production of batteries, including entering into memorandum of understanding (“MOUs”) with each of Cavico Lao Mining, Red Dirt Metals Limited and Alliance Nickel Limited for the supply of certain raw materials, including critical minerals.

 

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Additionally, in March 2023, VinES and Li-Cycle APAC Pte. Ltd. (“Li-Cycle”) entered into an agreement for recycling VinES’ Vietnamese-sourced battery materials and to assess the establishment of a recycling plant in Vietnam near VinES’ lithium-ion battery manufacturing facilities. The agreement builds upon a strategic, long-term battery recycling partnership between the parties, first announced in October 2022, which is expected to include global recycling solutions for VinES that support the companies’ ESG strategy and shared vision to advance a sustainable, closed-loop battery supply chain.

We intend to continue to work closely with Vingroup and other affiliates in the Vingroup ecosystem on opportunities to improve our battery development capabilities through VinES, which we are in the process of acquiring. For example, one of our Vingroup affiliates has made an investment in ProLogium, a manufacturer of next-generation solid-state batteries, which we believe will lead to future opportunities for us and VinES to collaborate in applying next-generation solid-state battery technology to VinFast vehicles. We seek to build a strong connection between our drivers, our brand and our service ecosystem to create the “VinFast Lifestyle,” facilitated by the technology framework we have created. As part of this lifestyle, we want to ensure that every driver experiences a true sense of community and is a swipe-of-an-app away from reliably connecting with our service network. Our technology framework aims to remove the anxieties associated with owning an electric vehicle, which is paramount to the VinFast Lifestyle. Our VinFast services program, called “VinFast Service,” has been designed to provide a seamless and ever-ready suite of service products and offerings conveniently available at the driver’s fingertips through our companion app. Our unique warranty offering of up to 10-year / 125,000-mile demonstrates our commitment to quality and reliability in our vehicles and underpins the trust we seek to establish between our brand and community.

With the VinFast Lifestyle in mind, we aim to deliver greater flexibility to our drivers when choosing to own a VinFast EV. We offer a battery subscription program that gives customers the flexibility to lease the battery in their EV from VinFast, rather than purchase the battery with the vehicle. This battery subscription program is available in select markets (primarily Vietnam) and models, and sales made under this program are expected to be made primarily in Vietnam. We currently expect our sales in North America and Europe to be for EVs with batteries included. Our battery subscription program, where available, is intended to supplement our primary model of outright sale of the full chassis and battery and to provide an alternative that makes our EVs accessible at a lower, more inclusive up-front price point. We also offer our customers the option to lease our vehicles through third-party financing partners. In the U.S., pursuant to the Inflation Reduction Act of 2022 (the “IRA”), customers opting to lease vehicles from our U.S. financing partners, where available, may indirectly benefit from the clean vehicle credit of up to $7,500 off that could be used by our financing partners to reduce the lease price of qualifying VinFast vehicles. We plan to monitor market demand and peers’ product offerings on an ongoing basis and adjust our go-to-market strategy dynamically with an aim of ensuring that VinFast EVs and the VinFast Lifestyle remain accessible.

Our service experience will utilize both a remote diagnostic and mobile in-person approach, allowing for ease of digital access and the reliability of a physical service presence. We expect that the majority of our service interventions will take place directly where our drivers are located, either through mobile service or remote, over-the-air (“OTA”) updates. We expect our mobile service to be supported by our fleet of EV vans and our technicians are expected to carry out most of their work where the customer is located. We believe our customers will also benefit from the technical capabilities of our directly owned and operated centers. We have also partnered with Urgent.ly to provide roadside assistance to our customers in the U.S. and Canada as part of their warranty coverage.

Our companion app is at the center of our service offering, leveraging our cloud-based digital ecosystem to create a simple and comprehensive interface for drivers with support for service requests, charging station locations and access to remote safety or control features of their vehicles. The companion app is intended to provide end-to-end digital features, defined by six key feature categories, including vehicle controls, charging,

 

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navigation, invisible service (e.g., booking service appointments, roadside assistance and firmware for OTA updates), smart vehicle functions (e.g., valet mode) and smart ownership functions (e.g., managing driver profiles, payments for charging services and paid-OTA updates). Our companion app and in-vehicle navigation system are also expected to be integrated with Electrify America’s application programming interface (“API”) data feed. This will enable our customers in the U.S. to locate the nearest charging stations, authenticate charging transactions, set charge levels, make payments, check the charging status of their vehicles and obtain transaction history. We pay Electrify America a recurring annual fee for these non-exclusive API services. See “Business—Integrated Service Offering.”

Meanwhile, our VinFast Power Solutions program is expected to enable stress-free at-home smart charging and seamless connectivity to an extensive charging network through our companion app when away from home. Our U.S. customers will have access to the Electrify America and EVgo networks of EV charging stations. Our non-exclusive charging network program agreement with Electrify America also entitles our customers to discounts and other promotional benefits such as complimentary charging sessions when using Electrify America’s charging station network.

Our vehicles are manufactured at our highly automated manufacturing facility in Hai Phong, Vietnam, which is the third-largest city in the country and situated just over 60 miles outside of Hanoi. Opened in 2019, our automobile manufacturing facility currently has a maximum production capacity rate (i.e., maximum number of vehicles that can be constantly manufactured in a year with additional shifts per day throughout the year) of up to 300,000 EVs per year, is situated in a land area of 348 hectares, and is a beneficiary of multiple tax incentives being located in the Dinh Vu-Cat Hai Economic Zone. This facility, which we believe is one of the most highly automated and modern manufacturing facilities in Southeast Asia, is equipped with over 1,400 robots and has the capacity for highly automated production lines that reach automation levels of 90% and 95% for press and paint shop, respectively. The press shop is capable of producing up to 38 frames per hour. The technology in this facility is also sourced from automated production providers, such as KUKA, ABB, Siemens and Durr. We believe this automation is a hallmark of our integrated capabilities across VinFast. This facility was used in the past to produce our legacy ICE vehicle lineup and now exclusively produces our VinFast EVs, e-scooters and e-buses. When our factory was built, we designed our manufacturing facility to incorporate a high degree of operational flexibility to accommodate the parallel production of our full suite of vehicle models. This foresight has allowed us to seamlessly switch from ICE to EV production and will be critical to our expected operational flexibility for producing multiple SUV models on the same assembly line simultaneously. From a logistics perspective, we are confident in our outbound shipping capabilities to global locations from our Hai Phong facility, given it is directly next to the Lach Huyen port in Vietnam, with significant access to global roll-on/roll-off cargo shipping partners. The Lach Huyen deep-sea port, which opened in 2018 with 14 meters of depth and has a capacity of 100,000 deadweight tons (“DWT”), is one of the deepest and largest ports in the country.

Bolstering our manufacturing operations in Vietnam is an on-site, integrated supplier park in Hai Phong that facilitates reliable and cost-effective collaboration with our partner-suppliers, as well as logistical efficiency for parts and supply to our factory shops. Our manufacturing operations in Vietnam have a significant cost advantage for sourcing key supplies and components because we source up to 60% of the components for our EVs (excluding batteries) from suppliers in Vietnam, most of which are established international suppliers, based on the total value of parts produced or packed in Vietnam as a percentage of the total free-on-board cost of our vehicles (excluding batteries) as of June 30, 2023. There are a number of key suppliers on-site in Hai Phong, including FORVIA, Lear Corporation and Grupo Antolin (“Antolin”). We also have plans to expand our integrated supplier park in Hai Phong with additional suppliers from Korea and China. In addition to the supplier park, some of our suppliers are located directly on our general assembly line, ensuring full integration and alignment across the manufacturing process. Outside of our on-site supplier park, we have relationships with approximately 650 additional suppliers globally. VinES, our key battery pack supplier and future subsidiary upon completion of our proposed acquisition of VinES from our Chairman, is in the process of developing battery cell

 

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production capabilities in Vietnam. We intend for VinES-produced battery cells to eventually be included in the battery packs that VinES supplies to us. VinES has completed the construction of and has begun operating their battery pack assembly facility in Ha Tinh, Vietnam which expands its battery pack production capabilities beyond its existing facilities in Hai Phong, Vietnam. In addition, VinES is developing a second lithium cell facility in Ha Tinh, Vietnam, in collaboration with Gotion. The supplier park and strategic supply chain have been beneficial to us in navigating and mitigating supply chain issues in the automobile industry in recent months. We believe we have been early and proactive in managing our supply chain and are focused on a diversified approach, particularly in our battery sourcing. We also have a dual-design approach to chip integration, which allows us to achieve the same functionality across vehicles with a variety of chip manufacturers. The flexibility we have built into our vehicles allows for diversification across the supply chain, without reliance on a single supplier for critical vehicle parts.

We believe that we have laid the groundwork to achieve future profitable growth through automation, access to a low-cost labor and talent pool in Vietnam, and the ability to achieve economies of scale through our mass market approach and volume efficiencies with suppliers. Our existing and fully automated manufacturing facility has the potential to be a significant competitive advantage for us as we rollout new vehicle platforms in the coming years. Relative to other geographies, Vietnam offers a very competitive cost of labor and a technically-skilled labor force, and we believe we have ample experience in automotive production, supplier management and optimizing operating efficiencies to produce greater margin benefits. We believe that targeting the highest-growing segments of the market, with our ability to produce vehicles at scale, will provide clear economies of scale from a supply and production standpoint. Our investments in our operational and manufacturing capabilities have allowed us to create structural levers for growth and give us confidence in our path to profitability.

In 2022, we entered into a series of agreements with North Carolina state and local authorities to build a manufacturing facility spanning across a site measuring approximately 733 hectares in Chatham County, North Carolina. Commissioning of the facility is targeted for 2025. The facility is expected to have an annual capacity of 150,000 vehicles per year. We believe this facility will help to diversify our manufacturing footprint in a critical growth market where we plan to expand and can enable us to take advantage of available state and local incentives. Additionally, our customers in the United States (“U.S.”) may be able to take advantage of U.S. federal tax credits once our North Carolina facility commences operations and final assembly of our vehicles, subject to, among other things, their income eligibility as well as our ability to meet requirements on battery components and critical minerals. We aim to replicate the successes of our Hai Phong facility as we extend our manufacturing footprint to the U.S. We intend for our North Carolina facility to have the same high level of automation and flexibility as our Hai Phong facility, closely situated supplier-partners and an integrated supplier park and supply chain.

To launch our products in international markets, in the first phase of our continuing development (“Phase I”), we are focused on three target markets, namely Vietnam, North America (comprising the U.S. and Canada) and Europe (comprising France, Germany and Netherlands). For the upcoming phase of our continuing development (“Phase II”), which we plan to begin in 2024, we have identified various addressable markets globally in addition to the initial target markets, based on the potential market size, accessibility and competitiveness. To accelerate our global reach to potential markets, we adopt a multi-channel distribution strategy and employ two business models: the first model involves the establishment of our own distribution and potentially showrooms in the respective market, which includes the initial target markets and the additional seven market clusters; whereas the second model focuses on appointing third party distributors for the respective market. Going forward, we will primarily focus on partnerships with distribution agents, dealers and service partners to broaden our reach to markets and customers in the global market.

Our commitment to environmental, social and governance (“ESG”) initiatives is institutionalized through a thoughtful, comprehensive and forward-thinking ESG strategy. Our products are meticulously designed with a

 

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low-to-zero emission framework and to minimize impact on the environment. We have adopted industry best practices to reduce our carbon footprint and target best-in-class environmental standards. As we lead the charge to a brighter, greener and safer future, we plan to leverage our social and governance policies as key catalysts for achieving our vision. Our social policies reflect our commitment to our customers, employees and communities, while our governance structure reflects our core values of fairness, efficiency, accountability and transparency. We seek to periodically validate our progress in honoring our ESG commitment and to identify areas for improvement.

We are led by a keenly focused management team that is highly motivated to deliver on our mission of making EVs smarter and more inclusive. Our Global CEO, Le Thi Thu Thuy, also holds the position of Vice Chairwoman of Vingroup and was one of the key Vingroup executives behind the push into vehicle manufacturing. She was responsible for the formation of VinFast and led the execution of a startup plan from the ground up in 2017, with our first vehicles delivered only 21 months later. She has built a highly experienced, diverse and globally sourced team to execute our strategy. This team includes veterans from the automotive and technology industries with an average of over 29 years of relevant industry experience. Our entrepreneurial and innovative culture from the top down in our organization is driven by our core belief that we are “boundless together.”

We had net losses of VND32,219.0 billion and VND49,848.9 billion ($2,094.5 million) in 2021 and 2022, respectively, and total debt (which is our short-term and current portion of long-term interest-bearing loans and borrowings and long-term interest-bearing loans and borrowings, excluding borrowings from related parties) of VND56,204.5 billion ($2,361.5 million) as of December 31, 2022. We had net losses for the period of VND23,312.2 billion and VND26,656.0 billion ($1,120.0 million) for the six months ended June 30, 2022 and 2023, respectively, and VND55,901.7 billion ($2,348.8 million) as of June 30, 2023.

Smart Mobility and the VinFast Differentiators

Our full-service driver and ownership experience is a hallmark of the VinFast brand and built around the concept of Smart Mobility, which we believe differentiates us from our competitors. To us, Smart Mobility encompasses the following:

 

   

Premium Quality Product

 

   

Thoughtful design for a boundless premium experience – We evoke EMOTION and PASSION between driver and car

 

   

Top-of-the-line vehicle lineup – We offer a LUXURIOUS and STYLISH product line with skilled craftsmanship in every detail

 

   

TECHNOLOGY FOR LIFE” – We embrace PERSONALIZATION and CONNECTIVITY with a full suite of standard smart infotainment features including a heads-up display, virtual personal assistant, in-car commerce and mobile office capabilities, creating a space for lifestyle between home and office

 

   

Sustainability – We aim to deliver our products RESPONSIBLY to help promote a greener world for us all

 

   

Steadfast focus on meeting world-class safety standards – We focus unwaveringly on SAFETY

 

   

Inclusive Price

 

   

ACCESSIBILITY – We seek to offer our products in a more approachable and accessible way relative to closest EV peers to help increase opportunities for greater EV adoption globally

 

   

We offer high performance, luxurious features, premium quality, an advanced suite of enhanced technology and cutting-edge engineering execution at a COMPETITIVE price point

 

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FLEXIBLE purchase options, including own, lease, and our battery subscription program, where available, to suit any customer’s preference

 

   

Peace-of-Mind Ownership Experience

 

   

Our goal is to provide BEST-IN-CLASS after-sale policy with up to 10-year / 125,000-mile warranty and 24/7 roadside assistance

 

   

WORRY-FREE experience through our “VINFAST SERVICE” model with remote and mobile service offerings

 

   

EASE-OF-ACCESS to our network of service showrooms and integrated suite of EV charging solutions through VinFast Power Solutions and partners such as Electrify America, EVgo, Bosch, Blink Charging Co. (“Blink”), Flo and ChargeHub.

Our Business Strengths

We believe we are well-positioned to achieve our strategic goals through several key business strengths, including the following:

 

   

Comprehensive Mobility Ecosystem with Strategic Focus on High Growth Segments: We boast a broad EV mobility platform, including electric cars for the global EV market and e-scooters and e-buses in Vietnam. We believe we have achieved a leading market share in Vietnam across each of the vehicle segments which we historically have delivered ICE cars and currently deliver EVs. We have targeted the highest-growth segments in our production ramp up and global launch strategy and have formulated our growth outlook with data from reputable global automotive industry consultants in building our international expansion plan. Not only do we forecast an increasing secular shift to EVs, but we have also studied our key growth markets and targeted the SUV segment initially, the segment of the passenger light vehicle market with the highest expected growth in demand. We believe we are reaching the fastest growing market for B, C, D and E vehicle segments at a competitive price point relative to our closest EV peers. We believe our pricing model, providing luxury-level features and premium quality at a competitive price point, positions our EV platform for achievable penetration of our addressable market, through the potential for conversion of a greater number of ICE drivers into new EV drivers. We have seen success in this conversion effort thus far. Given our strategic focus on EVs, we have tailored our business model to target segments that we believe will achieve the highest growth and profitability across the EV spectrum.

 

   

Attractive Lineup of Skillfully Engineered, Luxurious Electric SUVs: Our comprehensive lineup of EVs, highlighted by the VF 5, VF 8 and VF 9 and forthcoming VF 6, VF 7 and VF 3, is designed to enhance and complement the lives of our drivers through their lifestyle-friendly design. Incorporating high quality craftsmanship, alongside our proprietary tech-forward infotainment system, we aim to provide a luxurious, advanced and customizable offering of the features that EV drivers have come to desire. Every decision that we make in the design of our vehicles is framed with the driver in mind—from our spacious seats to the colored heads-up display, simplistic dashboard and personal assistant interface, we expect the VinFast system to become fully integrated into our drivers’ lives. On the exterior, our signature lighting that frames our “V” logo sweeps out to the corners of the car and powerfully exudes our brand. The overarching character of our vehicles provides a comfortable and modern feel, while making a powerful statement on the VinFast Lifestyle. In addition, we plan to introduce new features for the VF 8 and VF 9 in the next two years to provide a comprehensive and higher-end product offering, focusing on sustainable materials and adding more premium features such as higher-end interior materials, elevated smart features and enhanced ADAS.

 

   

Innovation-Driven, Technology-Centric Platform: We offer integrated, state-of-the-art technology across our vehicle segments and in our associated mobile application platform. Our platform was built with the

 

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philosophy of “technology for life,” driven by the belief that technology should enable the safest, most driver-friendly experience possible. To us, “technology for life” involves being thoughtful with our design features and R&D efforts, while maintaining a strategic focus on the highest value and most practical features to support our customers’ needs. Our development teams work with well-established engineering service providers and suppliers of high-quality components to research and develop differentiated and personalized features, such as virtual assistants, in-car e-commerce, in-car entertainment, facial recognition, voice biometrics and more to create a truly personalized driving experience. With safety being of paramount importance, our heads-up-display, standard across all VinFast EV models, helps to ensure drivers’ eyes remain on the road to avoid the distraction of looking at consoles or panels below. In addition, we are focused on including the latest practical safety features through our ADAS implementation. Each of the vehicles that we currently plan to launch are planned to be offered with ADAS Level 2 capabilities. Our technology platform provides ancillary revenue stream opportunities for VinFast over the ownership cycle, including features available for a monthly subscription fee.

 

   

Differentiated Ownership Experience to Drive Brand Loyalty: Our vision is to transform the traditional vehicle ownership model into a customized experience for our drivers, thereby increasing brand loyalty and adding more value to our drivers. We aim to do this through four key initiatives: our cloud-based companion app, unique warranty offer, VinFast Service program and VinFast Power Solutions. We intend for our app to allow for a fully-connected experience and act as a hub for owner-to-owner interaction, vehicle service, infotainment connectivity and more. Our comprehensive warranty of up to 10-year / 125,000-mile, including our roadside assistance package, demonstrates our commitment to the quality of our products. Our VinFast Service program will aim to bring best-in-class convenience to our customers through remote care (diagnostics and virtual repairs), mobile services (provided by a fleet of EV vans) and roadside assistance, all of which will be accessible through our customer app and our 24/7 service centers. Finally, through our VinFast Power Solutions, we aim to alleviate anxiety around charging and autonomy by offering at-home smart charging solutions coupled with access to an extensive charging network through our e-mobility platform.

 

   

Flexible Offering at an Inclusive Price Point: We believe that providing a flexible, high-quality product offering at an inclusive price point is critical to our “boundless together” philosophy. This philosophy offers the benefits of EVs to a broader population than possible today, which we believe will provide flexibility for us to capture market share. Our inclusive pricing model differentiates us from most OEMs in the market today that are pursuing the higher-priced premium segment. We target a broader market and offer a lower total cost of ownership (“TCO”) proposition without compromising on our design or technology suite. We believe we deliver this value not only through our competitive pricing relative to peers but also through our flexible ownership options, including through vehicle leasing with third-party partner banks and our battery subscription program for select markets (primarily Vietnam) and models, to reach a broader driver and ownership base. We have multiple advantages that allow us to maintain price competitiveness, including our highly-automated manufacturing facility, our access to a low-cost labor base in Vietnam, our well-diversified supplier base, relatively favorable tax environment and established trade agreements between Vietnam and the U.S., EU and other major global markets. These relative strengths have allowed us to build a competitive cost structure that enables our inclusive pricing model.

 

   

Demonstrated Speed to Market and Ability to Execute: We have demonstrated our ability to deliver on market capture and brand building within Vietnam. With our initial line of ICE vehicles, we reached start of production within 21 months from company inception. Within 18 months from product launch, we gained the leading market share in Vietnam for each of our product segments, based on management’s analysis of publicly available data, taking market share from global automotive OEMs from Europe, the U.S. and Asia who have historically dominated these segments. From a product launch perspective, we had great success with the launch of our VF e34, Vietnam’s first EV that we

 

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pioneered in 2021, setting records in Vietnam by receiving over 25,000 reservations within three months of accepting reservations, and receiving more than 417,500 organic discussions on social media in the two days following the announcement. The VF e34 was voted the “Green vehicle of 2022” and “Favorite C-segment CUV in 2022” by Otofun and among the top 10 best-selling vehicles in Vietnam in June 2022 according to Vietnamese Automobile Manufacturer’s Association (“VAMA”), TC Group and our public sales report. Similarly, our “The Future is Now” delivery event for the VF 8 at our manufacturing facility in Hai Phong in September 2022 was featured by over 700 news outlets and received over 8.5 million views on social media platforms. We believe our success in Vietnam has been enabled by our flat organizational structure, quick decision-making, and strong cooperation with internal and external parties. Our appearance at CES in January 2022 where we unveiled our VF 8 and VF 9 models, which was posted on various social media platforms and websites, received 7.7 million views in aggregate across social media platforms and websites within the first 48 hours of the unveiling. We have been featured by approximately 2,500 international and local media outlets, reaching a global audience of approximately 10 million with over 21 million impressions. After we debuted our planned EV lineup at CES in January 2022, we began accepting reservations globally for our VF 8 and VF 9 models and received approximately 24,000 reservations in the first 48 hours. We commenced delivery of the VF 8 “City Edition” vehicles in Vietnam in September 2022 and in the U.S. in March 2023, and the VF 9 and VF 5 in Vietnam in March and April 2023, respectively. First deliveries of the VF 6 are targeted for 2023 and first deliveries of the VF 7 and the VF 3 are targeted for 2024. In December 2022, our VF 8 and VF e34 electric vehicles ranked among the top 10 best-selling cars in Vietnam, according to BizHub.

 

   

Highly Automated Manufacturing Capabilities: We produce vehicles out of our factory in Hai Phong, which we believe is one of the most highly automated and modern manufacturing facilities in Southeast Asia. Our manufacturing facility opened in 2018 and has supported the production of nine vehicle models (four ICE models, one e-bus model and four EV models) and nine e-scooter models with 16 different variants. The automobile manufacturing factory has a maximum production capacity rate (i.e., maximum number of vehicles that can be constantly manufactured in a year with additional shifts per day throughout the year) of up to 300,000 EVs per year and a lean production capacity rate (i.e., the number of vehicles that can be constantly manufactured in a year without additional shifts) of up to 250,000 vehicles per year. We believe our proven manufacturing capabilities will enable us to deliver on a global scale. In addition, we benefit from an integrated supplier park at our Hai Phong facility with our key partners on site, including FORVIA, Lear Corporation and others, which helps us achieve economies of scale, drive manufacturing optimization and reduce costs. We source up to 60% of the components for our EVs (excluding batteries) from suppliers in Vietnam, most of which are established international suppliers, based on the total value of parts produced or packed in Vietnam as a percentage of the total free-on-board cost of our vehicles (excluding batteries) as of June 30, 2023. Our location in Hai Phong, the third-largest city in Vietnam and home to one of its largest deep-sea ports, provides a competitive advantage in logistics as we ship our vehicles across the globe. Additionally, in 2022, we entered into a series of agreements with North Carolina state and local authorities to build a manufacturing facility spanning across a site measuring approximately 733 hectares in Chatham County, North Carolina. Commissioning of the facility is targeted for 2025.

 

   

Foundational Support from Vingroup: Our relationship with our corporate parent, Vingroup, affords us a superior competitive footing relative to other peers entering the electric vehicle market, especially through the partnership channels of Vingroup. Vingroup, together with our shareholders, has provided substantial financial and strategic support to VinFast since our founding. As of September 30, 2023, approximately $10.7 billion has been deployed to fund operating expenses and capital expenditures of VinFast since 2017 by Vingroup, its affiliates and external lenders. In addition, we have entered into the Capital Funding Agreement with our Chairman, Mr. Pham Nhat Vuong and the Company Initial Shareholders that provides a framework for us to receive up to VND60,000.0 billion (approximately

 

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$2.5 billion), consisting of VND24,000.0 billion ($996.3 million) in grants from our Chairman, Mr. Pham Nhat Vuong, directly or through the Company Selling Securityholders, as well as up to VND24,000 billion ($996.3 million) in loans and up to VND12,000.0 billion ($498.2 million) in grants from Vingroup by April 2024, in amounts to be mutually agreed, at such time as required by us and subject to our Chairman and the Company Initial Shareholders having sufficient financial resources. As of September 30, 2023, Mr. Pham Nhat Vuong has disbursed an aggregate amount of VND7,000 billion ($290.6 million) to VinFast as a free grant and Vingroup has disbursed approximately VND23,000 billion ($954.8 million) in loans to VinFast in accordance with the Capital Funding Agreement. We will receive all of the proceeds from any sales of up to 46,293,461 Released Shares by the Company Selling Securityholders pursuant to the First Resale Registration Statement, net of any sales commissions, fees, brokerages, taxes and other related expenses. Such proceeds will be provided to us by the Company Selling Securityholders in relation to the Capital Funding Agreement. If the aggregate sum of such proceeds and the VND7,000 billion ($290.6 million) grant from Mr. Pham Nhat Vuong exceeds VND24,000.0 billion ($996.3 million), any additional proceeds from such sales by the Company Selling Securityholders will be provided to us as a further grant from the Company Selling Securityholders to us. We expect to receive an aggregate amount of up to VND29,000 billion (approximately $1.2 billion) in grants from Vingroup and the Company Selling Securityholders by April 2024.

We have benefited from access to the full range of intellectual property (“IP”) and R&D capabilities in the Vingroup technology ecosystem. On October 11, 2023, we announced that we intend to acquire 99.8% of VinES, a subsidiary of Vingroup, and one of our key battery partners. Our acquisition of VinES is a zero-consideration transaction other than assuming the loans of VinES. To support the ramp up for VinES until its operations stabilize, our Chairman, Pham Nhat Vuong, will provide grants to us for all interest payments relating VinES’ existing borrowings up to 2027. We have sourced battery packs from VinES since VinES commenced production of battery packs in the second quarter of 2022. VinES plans to be a fully integrated battery cell and pack manufacturer and is developing its own battery cell technology and battery cell production capabilities in Vietnam. In March 2023, VinES entered into a collaboration agreement with StoreDot to develop XFC battery cells in different form-factors, in preparation for mass production and supply. Our acquisition of VinES is intended to enable us to take control of our battery technology and achieve greater integration in our production value chain. VinES has completed the construction of and has begun operating their battery pack assembly facility in Ha Tinh, Vietnam which expands its battery pack production capabilities beyond its existing facilities in Hai Phong, Vietnam. In addition, VinES is developing a second lithium cell facility in Ha Tinh, Vietnam, in collaboration with Gotion.

We intend to continue to work closely with Vingroup and other affiliates in the Vingroup ecosystem on opportunities to improve our battery development capabilities through VinES, which we are in the process of acquiring. For example, another of our Vingroup affiliates has made an investment in ProLogium, a manufacturer of next-generation solid-state batteries, which we believe will lead to future opportunities for us and VinES to collaborate in applying next-generation solid-state battery technology to VinFast vehicles. We also enjoy strong demand for our EVs from our Vingroup affiliates. For example, we have an agreement Green and Smart Mobility Joint Stock Company (“GSM”), an e-scooter and EV rental and taxi services company founded by our Chairman, to sell VinFast EVs and e-scooters that will comprise GSM’s Vietnam-based fleet.

 

   

Experienced, Diverse and Entrepreneurial Management: Our leadership team is singularly focused on achieving the original goals set out by Vingroup when VinFast was founded: to establish a high-quality, globally recognized e-mobility EV manufacturer in Vietnam. We are led by Global CEO, Le Thi Thu Thuy, who also holds the position of Vice Chairwoman of Vingroup. With 25 years of experience, Ms. Le was one of the key Vingroup executives instrumental in the push for the creation of a tech-forward vehicle manufacturing company. She has assembled a deep bench of talent from the

 

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automotive, technology and finance industries, unified by the spirit of “boundless together” and dedicated to driving the electric vehicle revolution for VinFast. We also benefit from the diverse experiences of our senior management team who come from different industries, including those that have previously served in different roles in leading automotive and technology companies, such as Ford, Toyota, Aston Martin, Land Rover, Stellantis and Chrysler.

Our Key Focus Areas and Long-Term Growth Strategies

Our long-term growth strategy is anchored on the following key pillars:

 

   

Increase Global Reach to Meet Demand: Our strategy is to continue growing our global footprint into areas where we expect high EV demand growth.

In Phase I, we focus on three markets, namely Vietnam, North America (comprising the U.S. and Canada), and Europe (comprising France, Germany and Netherlands). We are employing a direct-to-customer (“D2C”) sales model to promote VinFast brand awareness and enable a personalized and approachable experience for VinFast cars. We have established a network of VinFast self-operated showrooms under three different showroom models (1S, 2S and 3S), with each showroom model tailored to create a specified customer experience with smaller showrooms intended for customer education in areas with high foot traffic, while larger showrooms offer opportunities to test drive our vehicles. Our showrooms serve as a place for customers to experience the VinFast brand and products and meet members of the VinFast community, and as a hub for VinFast service solutions.

As of June 30, 2023, we have 122 showrooms in Vietnam, the U.S. (all of which are in California), France, Germany, Netherlands and Canada, including VinFast-owned showrooms and dealer’s showrooms. In our home country, Vietnam, our products are offered through an extensive nationwide network of VinFast showrooms and dealership showrooms.

In Phase II, starting from 2024, we plan to adopt two major business models:

 

   

Business model 1: This model is applied to Phase I markets of Vietnam, North America (U.S. and Canada) and Europe (France, Germany, Netherland), and seven additional market clusters in Asia (including India, Indonesia and Malaysia), the Middle East, the rest of Europe, Africa and Latin America, where we plan to establish our own distributor and may open our showrooms to introduce our VinFast brand in the initial stage, however, our primary focus will be on expanding our dealer network to distribute our premium brands and provide excellent customer experiences. In the U.S., we expect to grow our dealership network to expand our presence and increase penetration across the country. We plan to take advantage of third-party dealers, showrooms, service centers and charging network providers to expand our coverage and touchpoints. We are also evaluating the feasibility of completed-knock-down or semi-knock-down plants in select markets where local tax incentives may be available, an in-depth auto-industry supply chain local market and strategies to lower logistical costs to provide more competitive offerings to our customers.

 

   

Business model 2: We have identified between 40 and 50 potential markets globally and also plan to engage high-quality distributors to import and distribute VinFast cars into local markets starting from 2024. We have signed memorandums of understanding and distribution agreements with various car importers and distributors across Asia, Europe and the Middle East. We may consider establishing distribution companies and expanding our presence in these markets in the long term.

We plan to commence deliveries of our EVs in Indonesia in 2024 with right-hand driving models of the VF e34 and VF 5, with the VF 6 and VF 7 to follow. We have also identified Indonesia from among our seven new market clusters as a key potential market for the potential establishment of

 

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manufacturing facilities for our EVs and batteries due to the relatively low cost and availability of domestic raw materials. Based on our evaluation of the market opportunity in Indonesia, we have set a preliminary investment target of up to approximately $1.2 billion into Indonesia in the long-term. The target includes approximately $150 to $200 million that we envision applying toward the establishment of a Completely Knocked Down facility, or “CKD facility,” with production capacity in the range of 30,000 and 50,000 cars per year and a target production start date no later than 2026. Additional investments in the country up to the preliminary investment target would be subject to market conditions and other factors.

We plan to roll out our online platform globally to execute our digital strategy of complementing the in-person experience at VinFast showrooms and third party showrooms. Our website enables full vehicle customization and offers virtual reality features that provide customers with a near-tangible buying experience from the comforts of their homes. We plan to continue to develop our online-to-offline (“O2O”) sales channels to generate leads and increase foot traffic to our physical showrooms. We plan to further extend the personalized O2O process to cover the delivery, after-sales policy and maintenance parts of the VinFast ownership experience. Each of our customers has a unique VinFast ID that connects and synchronizes data relating to their brand engagement on all of our channels, including our website, companion app, physical showrooms and service points.

As part of our B2B strategy, we plan to continue to partner with large corporations and well-known leasing, mobility, short-term rental suppliers and taxi service providers. Since the beginning of our global rollout, we have evaluated potential demand from the B2B customer segment and identified it as a meaningful contributor to our strategic vision. We believe that taxi rides and short-term rentals offer customers the opportunity to test drive and experience the vehicles. Through our recent partnership with GSM, an e-scooter and EV rental and taxi services company founded by our Chairman, customers will have the opportunity to experience VinFast vehicles in action, which we believe will boost demand for our products. GSM plans to expand its operation into our key international markets. This would provide us with a significant opportunity to offer international customers the chance to test drive and experience our vehicles.

 

   

Continue Augmenting Our “Technology for Life” Offering: We intend to remain at the forefront of automotive technology through our in-house R&D and external partnerships. We seek to deliver the best experience for our drivers with innovative customer-centric applications inside and outside the vehicles. We plan to continuously make our vehicles smarter over time through OTA system updates, and we intend to leverage the power of data to understand and serve our drivers better through artificial intelligence (“AI”). Through a network of renowned partners in various industries, we aim to continue creating a technology ecosystem that allows us to seamlessly adapt to the changing technology landscape broadly, and develop features with the driver in mind, such as adding additional languages on our voice assistant, more connectivity with mobile phones and more. We have more technologies and applications still in the pipeline (such as enhanced autonomous features with ADAS) and plan to incorporate them into our vehicles to constantly provide a state-of-the-art driving experience that we believe will attract new drivers to our brand, build brand loyalty with existing drivers and help VinFast stand out as a leader among our peers. Each of the vehicles that we currently plan to launch are planned to be offered with ADAS Level 2 capabilities.

 

   

Innovate Our Commercial Approach to Drive Incremental Market Share: We intend to rapidly expand our sales network across the globe, while simultaneously building out after-sales infrastructure to support our drivers. We intend to approach the market with a significant social media presence, as well as traditional advertising and in-person showrooms. A large tenet of our growth strategy will come from our O2O customer engagement strategy, with the aim of allowing a high level of customization and personalization for our drivers. Customers will be able to engage with us online through our website and companion app, while our showroom network will provide an offline, tangible in-person

 

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experience. We believe continued direct engagement is important, not only though our membership program, but also through multiple touchpoints on social media. We believe the insights gained through direct interaction with our drivers will allow us to respond efficiently to customer needs in future vehicle feature development. Additionally, through VinES, we plan to work on an ongoing basis to optimize our battery costs, in order to maintain our price point differentiation in the EV market.

 

   

Expand Our Product Offering: We plan to continually evaluate the benefits of expanding our portfolio into other high-growth, high-demand EV segments in the future. We plan to introduce new features for the VF 8 and VF 9 in the next two years to provide a comprehensive and higher-end product offering, focusing on sustainable materials and adding more premium features such as higher-end interior materials, elevated smart features and enhanced ADAS. We also intend to evaluate expansion into segments such as sedans, pickup trucks and commercial electric vehicles. We have a track record of rolling out our vehicle platforms at a fast pace and aim to capitalize on market opportunities complementary to our platform. Our in-house development of new products is based on research on the demands of our drivers, and we are built to be nimble in responding to market opportunities. With respect to our current anticipated all-electric SUV product line, in addition to the VF e34 (C-segment) rolled out in 2021, the VF 8 (D-segment) rolled out in 2022, and the VF 5 (A-segment) and VF 9 (E-segment) rolled out in early 2023, we plan to begin delivering the VF 6 (B-segment) in 2023, and the VF 7 (C-segment) and the VF 3 in 2024. The VF 5, VF 6 and VF 7 were recognized on Forbes Wheels’ list of “The 10 coolest cars from CES 2022.” We selected high-growth markets for these vehicles based on our evaluation of market size and demand opportunity, and we will use the same level of scrutiny in conducting our market research to determine how and when to expand into new product lines and new markets.

 

   

Enhance and Refine Our Service Offering: Building on our customer-centric mindset throughout our development and commercial processes, we plan to continue expanding and improving our service offering. As we continue to expand into additional geographies globally, we plan to build upon our service network and mobile service platform to ensure on-demand coverage for all drivers. Given our vehicles are OTA-upgrade enabled, we intend to continue developing technology to make servicing a remote or hands-free process to the greatest extent possible. Along with expanding our service offering, we expect to add incremental charging partners to our network, ensuring seamless and accessible charging.

 

   

Pursue Enhanced Manufacturing Automation and Capacity Expansion: We plan to expand our global maximum production capacity through investments in technology, equipment and infrastructure to add manufacturing capacity within our existing facility in Hai Phong, as well as opening an additional factory in the U.S. (assuming the realization of expected growth in demand for our EVs and the availability of financing for, and timely and on-budget completion of, capacity expansion projects). In 2022, we entered into a series of agreements with North Carolina state and local authorities to build a large-scale manufacturing center at the Triangle Innovation Point megasite in North Carolina’s Chatham County. In July 2023, we broke ground at our manufacturing facility in North Carolina, which marked the commencement of the construction work for phase 1 of the factory. Commissioning is targeted for 2025. Phase 1 of the facility is expected to have an initial capacity of 150,000 vehicles per year, with the site, layout and infrastructure of the facility designed to accommodate further capacity expansion to around 250,000 vehicles per year upon completion of phase 2. We believe this facility will help diversify our manufacturing footprint in a critical growth market where we plan to expand and take advantage of applicable state and local incentives. We plan to continue to manufacture our vehicles in Vietnam and export them to the U.S. to fill U.S. orders until our North Carolina facility commences production and meets our U.S. volume requirements. In addition, we plan to continue improving the efficiency of our manufacturing process with the implementation of additional automated technology throughout the entire manufacturing value chain, which we believe is already

 

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conforming to Industry 4.0 standards of interconnectivity, automation, machine-learning and real-time data processing incorporation.

 

   

Broaden Our Ancillary Revenue Streams: Our vehicles’ built-in features provide a large opportunity for ancillary revenue streams in the future. We envision the following potential ancillary revenue streams in addition to our primary revenue focus on vehicle and aftermarket sales: licensing of higher-tech autonomy features, licensing the use of advanced infotainment and data sharing features, VinFast Service program, vehicle financing and subscription services through our infotainment platform. From a data collection perspective, we see a large opportunity to develop increased features and functionalities by sharing our collective intelligence with partners as well.

 

   

Drive Intelligent Growth through Organic and Inorganic Opportunities: We plan to pursue potential organic and inorganic growth opportunities which align with our business strategy. We plan to put capital to work to grow in new organic channels, including broadening and improving upon our current portfolio offering (such as potential supplier integration and additional vehicle segments). We plan to also explore potential avenues of inorganic growth in furtherance of the mission of Smart Mobility. To date, we and our affiliates have made investments in early-stage technology companies that could be additive to our platform in the future, including: StoreDot, which plans to manufacture extremely fast charging lithium-ion battery cells; ProLogium, which is developing solid-state battery cells; and Autobrains, a developer of AI for autonomous driving. We look forward to the possibility of building relationships with other companies that share our entrepreneurial, innovative spirit and plan to continue making relevant investments to expand the VinFast ecosystem by bringing strategic partners together with meaningful capital.

 

   

Continue to Promote and Invest in our ESG Framework: As we continue to expand in new global markets, we acknowledge global warming and climate related risks. As a company, we are resiliently pursuing zero-emission vehicles both through innovation and sustainability. We have declared our commitment to sustainability as a signer of the COP26 ZEV declaration and The Climate Pledge. Recognizing the need for green and clean energy, we ceased production of ICE vehicles in early November 2022 and converted our manufacturing entirely to EV vehicles in line with our journey to reduce our carbon footprint and pursue environmental stewardship. Apart from the inherent environmental benefits of our product line, through VinES, we plan to operate a battery recycling program in the pursuit of achieving zero waste to landfill. We conduct social outreach programs in the communities where we operate in support of local enterprises and social economic upliftment and for our employees and stakeholders, as a key component of our operations. From a governance perspective, we continue to serve the best interests of our shareholders through a balanced board of directors with a focus on diversity, equity and inclusion in our leadership and complying with the latest index and regulatory requirements. We expect promoting this ESG framework will generate recognition for our brand, while also promoting a well-rounded and inclusive environment that we expect will be attractive to current and future VinFast stakeholders.

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties that may materially affect our business, financial condition, results of operations and prospects, as more fully described in “Risk Factors” immediately following this prospectus summary. These risks include, among others, the following:

 

   

We are a growth stage company with a history of losses, negative cash flows from operating activities and negative working capital;

 

   

We expect to require significant additional capital, which we expect to fund through additional debt and equity financing, to support our business growth, and such capital may not be available on

 

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commercially reasonable terms or at all, which may impose restrictions on capital raising activities and or other financial or operational matters or lead to dilution of your shareholding in VinFast;

 

   

We are a new entrant in the EV industry and faces risks in the marketing and sale of our EVs in international markets where we only recently began delivering;

 

   

Our ability to successfully introduce and market net products and services;

 

   

Our ability to grow and market our brand and EVs in markets outside Vietnam and manage any negative publicity which may harm our brand, reputation, public credibility and consumer confidence, including any negative publicity arising from any differences in the advertised driving range, certified driving range and actual driving performance of our EVs, which depend on various factors beyond our control, including driving habits and conditions;

 

   

Our ability to successfully compete in the highly competitive automotive industry;

 

   

Our ability to control the costs associated with our operations;

 

   

We depend, directly and indirectly, on suppliers for component parts and raw materials and any failure on the part of the suppliers to deliver such supplies according to our schedule and at prices, quality and volumes acceptable to us, could materially and adversely affect our business, results of operations and financial condition;

 

   

Our ability to maintain our relationship with existing critical suppliers and to create relationships with new suppliers;

 

   

Our establishment of manufacturing facilities outside of Vietnam and the expansion of our production capacity within Vietnam may be subject to delays or cost overruns, may not produce expected benefits or may cause us to not meet our projections for future production capacity;

 

   

Reservations for our vehicles may not result in completed sales and our actual vehicle sales and revenue could differ materially from the number of reservations received;

 

   

Demand for, and consumers’ willingness to adopt EVs, which may be affected by various factors, including developments in EV or alternative fuel technology;

 

   

Inadequate access to EV charging stations or related infrastructure;

 

   

The unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for EV manufacturers and buyers;

 

   

Any failure to maintain an effective system of internal control over financial reporting in the future and any failure to accurately and timely report our financial condition, results of operations or cash flows could adversely affect investor confidence;

 

   

We have identified material weaknesses in our internal control over financial reporting and any ineffective remediation of such material weaknesses, any additional material weaknesses in the future or failure to develop and maintain effective internal control over financial reporting could impair our ability to produce timely and accurate financial statements and comply with applicable laws and regulations;

 

   

Our corporations actions that require shareholder approval will be substantially controlled by our controlling shareholders, which may prevent you and other shareholders from influencing significant decisions and reduce the value of your investment;

 

   

We rely on Vingroup for financial support and Vingroup affiliates for key aspects of our business, and any potential conflicts of interests with or any events impacting the reputations of our affiliates or

 

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unfavorable market conditions or adverse business operation of Vingroup and Vingroup affiliates could have a material adverse effect on our business and results of operations; and

 

   

the other matters described in the section titled “Risk Factors.”

Recent Developments

Unaudited Interim Condensed Consolidated Financial Statements

As of and for the three and nine months ended September 30, 2022 and 2023

Unaudited Interim Condensed Consolidated Balance Sheets

 

     As of
December 31,
2022
     As of
September 30,
2023
     As of
September 30,
2023
 
     VND million      VND million      USD  
            (Unaudited)      (Unaudited)  

ASSETS

        

CURRENT ASSETS

        

Cash and cash equivalents

     4,271,442        3,154,673        130,959,068  

Short-term restricted cash

     —         35,766        1,484,744  

Trade receivables

     652,922        1,157,810        48,063,847  

Advances to suppliers

     8,968,752        6,360,490        264,041,264  

Inventories, net

     21,607,277        24,408,253        1,013,253,062  

Short-term prepayments and other receivables

     6,457,169        6,875,276        285,411,432  

Short-term derivative assets

     532,718        570,454        23,681,099  

Current net investment in sales-type lease

     5,448        26,930        1,117,938  

Short-term investments

     3,902        4,053        168,251  

Short-term amounts due from related parties

     1,978,097        3,811,558        158,228,154  

Assets classified as held for sale

     360,893        356,104        14,782,847  
  

 

 

    

 

 

    

 

 

 

Total current assets

     44,838,620        46,761,367        1,941,191,706  
  

 

 

    

 

 

    

 

 

 

NON-CURRENT ASSETS

        

Long-term restricted cash

     —         631,959        26,234,339  

Property, plant and equipment, net

     57,188,667        63,934,427        2,654,092,200  

Intangible assets, net

     1,461,071        1,535,181        63,729,545  

Goodwill

     272,203        272,203        11,299,888  

Operating lease right-of-use assets

     4,558,983        6,670,955        276,929,511  

Long-term derivative assets

     696,332        279,675        11,610,071  

Long-term advances to suppliers

     29,082        —         —   

Long-term prepayments

     7,611        35,296        1,465,233  

Non-current net investment in sales-type lease

     82,062        310,859        12,904,604  

Long-term amounts due from related parties

     44,533        47,445        1,969,571  

Other non-current assets

     4,426,135        4,362,490        181,098,842  
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     68,766,679        78,080,490        3,241,333,804  
  

 

 

    

 

 

    

 

 

 

TOTAL ASSETS

     113,605,299        124,841,857        5,182,525,510  
  

 

 

    

 

 

    

 

 

 

 

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Unaudited Interim Condensed Consolidated Balance Sheets (continued)

 

     As of
December 31,
2022
    As of
September 30,
2023
    As of
September 30,
2023
 
     VND million     VND million     USD  
           (Unaudited)     (Unaudited)  

DEFICIT AND LIABILITIES

      

CURRENT LIABILITIES

      

Short-term and current portion of long-term interest-bearing loans and borrowings

     14,579,553       21,154,961       878,200,050  

Trade payables

     16,636,820       10,551,587       438,025,114  

Deposits and down payment from customers

     1,572,537       630,069       26,155,880  

Short-term deferred revenue

     107,448       129,999       5,396,613  

Short-term accruals

     11,056,666       10,101,033       419,321,392  

Other current liabilities

     4,177,978       8,917,624       370,194,861  

Current operating lease liabilities

     768,883       1,345,977       55,875,171  

Amounts due to related parties

     17,325,317       45,974,308       1,908,518,743  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     66,225,202       98,805,558       4,101,687,824  
  

 

 

   

 

 

   

 

 

 

NON-CURRENT LIABILITIES

      

Long-term interest-bearing loans and borrowings

     41,624,960       45,678,450       1,896,236,872  

Long-term financial liability

     15,180,723       17,245,422       715,904,438  

Other non-current liabilities

     606,429       1,833,625       76,118,768  

Non-current operating lease liabilities

     3,256,351       5,035,167       209,023,496  

Long-term deferred revenue

     499,395       920,015       38,192,328  

Deferred tax liabilities

     947,981       939,399       38,997,011  

Long-term accruals

     16,007       134,286       5,574,578  

Amounts due to related parties

     21,918,710       18,782,079       779,695,255  
  

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     84,050,556       90,568,443       3,759,742,746  
  

 

 

   

 

 

   

 

 

 

DEFICIT

      

Ordinary shares – VinFast Auto (2,299,999,998 and 2,332,229,366 shares issued and outstanding as of December 31, 2022 and September 30, 2023 respectively)

     871,021       7,621,603       316,393,499  

Accumulated losses

     (127,188,455     (168,785,639     (7,006,751,588

Additional paid-in capital

     12,311,667       19,356,607       803,545,477  

Other comprehensive loss

     (104,065     (101,400     (4,209,390
  

 

 

   

 

 

   

 

 

 

Deficit attributable to equity holders of the parent

     (114,109,832     (141,908,829     (5,891,022,002
  

 

 

   

 

 

   

 

 

 

Non-controlling interests

     77,439,373       77,376,685       3,212,116,942  
  

 

 

   

 

 

   

 

 

 

Total deficit

     (36,670,459     (64,532,144     (2,678,905,060
  

 

 

   

 

 

   

 

 

 

TOTAL DEFICIT AND LIABILITIES

     113,605,299       124,841,857       5,182,525,510  
  

 

 

   

 

 

   

 

 

 

 

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Unaudited Interim Condensed Consolidated Statements of Operations

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2022     2023     2023     2022     2023     2023  
    VND million     VND million     USD     VND million     VND million     USD  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Revenues

           

Sales of vehicles

    2,699,158       7,697,601       319,548,383       8,779,656       16,722,094       694,179,667  

Sales of merchandise

    —        14,656       608,410       46,414       52,925       2,197,061  

Sales of spare parts and components

    428,205       215,420       8,942,671       1,463,614       587,758       24,399,435  

Rendering of services

    50,723       127,059       5,274,565       159,782       300,046       12,455,727  

Rental income

           

Revenue from leasing activities

    4,688       199,570       8,284,695       51,006       515,640       21,405,621  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues

    3,182,774       8,254,306       342,658,724       10,500,472       18,178,463       754,637,511  

Cost of vehicles sold

    (6,155,256     (10,043,980     (416,952,966     (17,485,112     (25,483,143     (1,057,874,673

Cost of merchandise sold

    —        (14,831     (615,675     (46,245     (53,364     (2,215,285

Cost of spare parts and components sold

    (413,965     (134,965     (5,602,765     (1,310,118     (365,791     (15,184,981

Cost of rendering services

    (59,753     (294,448     (12,223,338     (193,456     (683,044     (28,355,017

Cost of leasing activities

    —        (233,743     (9,703,309     (42,849     (584,174     (24,250,653
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of sales

    (6,627,411     (10,721,967     (445,098,053     (19,077,780     (27,169,516     (1,127,880,609
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross loss

    (3,444,637     (2,467,661     (102,439,329     (8,577,308     (8,991,053     (373,243,099
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

           

Research and development costs

    (3,593,736     (3,167,066     (131,473,536     (14,041,574     (11,787,830     (489,344,929

Selling and distribution costs

    (1,069,610     (1,462,236     (60,701,399     (3,361,210     (4,031,377     (167,353,439

Administrative expenses

    (857,868     (1,301,200     (54,016,356     (1,981,183     (3,862,061     (160,324,671

Net other operating expenses

    (859,763     (524,291     (21,764,747     (1,475,251     (622,829     (25,855,328

Operating loss

    (9,825,614     (8,922,454     (370,395,367     (29,436,526     (29,295,150     (1,216,121,466
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Finance income

    12,243       25,207       1,046,412       91,861       66,470       2,759,351  

Finance costs

    (2,027,884     (3,526,722     (146,403,836     (5,454,794     (8,599,269     (356,979,078

Net (loss)/gain on financial instruments at fair value through profit or loss

    617,010       (2,561,432     (106,332,019     1,277,296       (3,840,505     (159,429,823

Loss before income tax expense

    (11,224,245     (14,985,401     (622,084,810     (33,522,163     (41,668,454     (1,729,771,016
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tax income/(expense)

    983       (18,444     (765,661     (1,013,254     8,582       356,262  

Net loss for the period

    (11,223,262     (15,003,845     (622,850,471     (34,535,417     (41,659,872     (1,729,414,754
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to non-controlling interests

    (14,623     (17,152     (712,026     (37,360     (66,490     (2,760,181

Net loss attributable to controlling interest

    (11,208,639     (14,986,693     (622,138,445     (34,498,057     (41,593,382     (1,726,654,573

 

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Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss

 

    For the three months ended September 30,     For the nine months ended September 30,  
    2022     2023     2023     2022     2023     2023  
    VND million     VND million     USD     VND million     VND million     USD  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Net loss for the period

    (11,223,262     (15,003,845     (622,850,471     (34,535,417     (41,659,872     (1,729,414,754

Other comprehensive (loss)/income

           

Other comprehensive (loss)/income that will be reclassified to profit or loss in subsequent periods (net of tax):

           

Exchange differences on translation of foreign operations

    16,591       56       2,325       7,882       2,665       110,632  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net other comprehensive (loss)/income that will be reclassified to profit or loss in subsequent periods

    16,591       56       2,325       7,882       2,665       110,632  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive loss for the period, net of tax

    (11,206,671     (15,003,789     (622,848,146     (34,527,535     (41,657,207     (1,729,304,122

Net loss attributable to non-controlling interests

    (14,623     (17,152     (712,026     (37,360     (66,490     (2,760,181
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss attributable to controlling interest

    (11,192,048     (14,986,637     (622,136,120     (34,490,175     (41,590,717     (1,726,543,941
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to ordinary shareholders

    VND       VND       USD       VND       VND       USD  

Basic and diluted

    (4,876     (6,491     (0.27     (15,006     (18,060     (0.75
                                  Unit: Shares  

Weighted average number of shares used in loss per share computation

           

Basic and diluted

    2,298,963,211       2,308,837,804       2,308,837,804       2,298,963,211       2,303,020,921       2,303,020,921  

 

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Unaudited Interim Condensed Consolidated Statements of Cash Flows

 

     For the nine months ended September 30,  
     2022     2023     2023  
     VND million     VND million     USD  
     (Unaudited)     (Unaudited)     (Unaudited)  

OPERATING ACTIVITIES

      

Net loss for the period

     (34,535,417     (41,659,872     (1,729,414,754

Adjustments to reconcile net loss to net cash flows:

      

Depreciation of property, plant and equipment

     2,930,220       4,270,158       177,265,889  

Amortization of intangible assets

     2,141,071       212,631       8,826,892  

Impairment of assets and changes in fair value of held for sale assets

     80,787       1,112,176       46,169,455  

Changes in operating lease right-of-use assets

     391,477       823,044       34,166,798  

Provision related to compensation expenses, assurance-type warranties and net realizable value of inventories

     4,287,318       4,599,665       190,944,622  

Allowance against receivable and advances to suppliers

     172,571       —        —   

Deferred tax expenses/(income)

     1,013,253       (8,582     (356,262

Unrealized foreign exchange losses

     1,453,928       679,868       28,223,172  

Investment losses

     18,962       —        —   

Net (gain)/losses on financial instruments at fair value through profit or loss

     (1,277,296     3,840,505       159,429,823  

Change in amortized costs of financial instruments measured at amortized cost other than nominal interest

     1,450,505       2,810,683       116,679,107  

Change in working capital:

      

Trade receivables and advance to suppliers

     (3,586,049     (1,734,495     (72,003,612

Inventories

     (9,516,719     (6,441,491     (267,403,836

Trade payables, deferred revenue and other payables

     9,798,740       (13,490,318     (560,019,843

Operating lease liabilities

     (378,096     (590,283     (24,504,255

Prepayments, other receivables and other assets

     25,994       (62,667     (2,601,477
  

 

 

   

 

 

   

 

 

 

Net cash flows used in operating activities

     (25,528,751     (45,638,978     (1,894,598,281
  

 

 

   

 

 

   

 

 

 

 

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Unaudited Interim Condensed Consolidated Statements of Cash Flows (continued)

 

     For the nine months ended September 30,  
     2022     2023     2023  
     VND million     VND million     USD  
     (Unaudited)     (Unaudited)     (Unaudited)  

INVESTING ACTIVITIES

      

Purchase of property, plant and equipment, and intangible assets

     (12,674,364     (20,022,855     (831,203,246

Repayment under a business investment and cooperation contract

     (968,773     —        —   

Proceeds from disposal of property, plant and equipment

     1,528,669       922,675       38,302,752  

Disbursement of loans

     (3,736     —        —   

Collection of loans

     1,017,899       545,400       22,641,039  

Proceeds from disposal of equity investment (net of cash held by entity being disposed)

     (2,240     —        —   
  

 

 

   

 

 

   

 

 

 

Net cash flows used in investing activities

     (11,102,545     (18,554,780     (770,259,455
  

 

 

   

 

 

   

 

 

 

FINANCING ACTIVITIES

      

Capital contribution from owners

     6,000,000       6,778,711       281,402,756  

Deemed contribution from owners

     646,655       7,000,000       290,589,066  

Proceeds from borrowings

     53,244,294       74,955,275       3,111,597,618  

Cash received under a business cooperation contract

     —        5,875,000       243,887,251  

Repayment of borrowings

     (24,438,219     (30,884,928     (1,282,117,481
  

 

 

   

 

 

   

 

 

 

Net cash flows from financing activities

     35,452,730       63,724,058       2,645,359,210  
  

 

 

   

 

 

   

 

 

 

Net decrease in cash and cash equivalents and restricted cash

     (1,178,566     (469,700     (19,498,526

Cash, cash equivalents and restricted cash at beginning of the period

     3,024,916       4,271,442       177,319,191  

Net foreign exchange difference on cash, cash equivalents and restricted cash

     8,251       20,656       857,487  
  

 

 

   

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of the period

     1,854,601       3,822,398       158,678,152  
  

 

 

   

 

 

   

 

 

 

Supplement disclosures of non-cash activities

      

Non-cash property, plant and equipment additions

     7,699,963       9,269,312       384,794,387  

Establishment of right-of-use assets and lease liabilities at commencement dates

     2,200,405       2,935,015       121,840,467  
  

 

 

   

 

 

   

 

 

 

Financial results for the three months ended September 30, 2023

Revenues

 

   

Total revenues were VND8,254,306 million ($342.7 million), representing an increase of 159.3% from the third quarter of 2022 and an increase of 3.8% from the second quarter of 2023.

 

   

Vehicle sales were VND7,697,601 million ($319.5 million), representing an increase of 185.2% from the third quarter of 2022 and an increase of 2.8% from the second quarter of 2023. The increase in vehicle sales over the third quarter of 2022 was mainly due to a significant increase in EV and e-scooter sales volume in Vietnam in the third quarter of 2023, including the VF e34, VF 8, VF 5, VF 9, and the Feliz and Evo. This increase over the third quarter of 2022 was partially offset by

 

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phasing out production of ICE vehicles in furtherance of our plan to fully transform into a pure EV player, which resulted in minimal revenue from sales of ICE vehicles in the third quarter of 2023.

Cost of Sales and Gross Margin

 

   

Cost of sales was VND10,721,967 million ($445.1 million), representing an increase of 61.8% from the third quarter of 2022 and flat versus the second quarter of 2023. The increase over the third quarter of 2022 was primarily attributable to increases in the cost of vehicles sold as the Company delivered more EVs and e-scooters to customers in the third quarter of 2023. This increase was partially offset by a decrease in the total cost of ICE vehicles sold, due to the decrease in ICE vehicle sales volume in furtherance of our plan to fully transform into a pure EV player and a decrease in accelerated amortization and depreciation expenses due to the ICE production phase out.

 

   

Gross loss was VND2,467,661 million ($102.4 million), representing a decrease of 28.4% from the third quarter of 2022 and a decrease of 9.1% from the second quarter of 2023.

 

   

Gross margin was negative (29.9%), as compared to negative (108.2%) in the third quarter of 2022 and negative (34.1%) in the second quarter of 2023. The improvement of gross margin over the third quarter of 2022 was mainly attributed to a strong increase in sales volume and a decrease in charges to write down the carrying value of inventories. The improvement of gross margin over the second quarter of 2023 was due to lower sales volume to VinFirst customers, who were entitled to more incentives, and better economies of scale resulting from a strong increase in sales volume of e-scooters.

Operating Expenses

 

   

Research and development (R&D) costs were VND3,167,066 million ($131.5 million), representing a decrease of 11.9% from the third quarter of 2022 and a decrease of 12.3% from the second quarter of 2023. The decrease over the third quarter of 2022 and the second quarter of 2023 was mainly attributed to the decrease in R&D costs paid to external suppliers (including taxes on expenses paid out to suppliers) and other costs related to our R&D activities for EVs as we brought three EV models into commercial production in the last four quarters.

 

   

Selling, general and administrative expenses were VND2,763,436 million ($114.7 million), representing an increase of 43.4% from the third quarter of 2022 and flat versus the second quarter of 2023. The increase over the third quarter of 2022 was primarily attributable to an increase in labor costs and rental costs, which are primarily attributable to our efforts to scale up our sales and administrative operations in North America and Europe.

Loss from Operations

 

   

Loss from operations was VND8,922,454 million ($370.4 million), representing a decrease of 9.2% from the third quarter of 2022 and a decrease of 3.3% from the second quarter of 2023.

Net Loss and Earnings Per Share

 

   

Net loss on financial instruments at fair value through profit or loss was VND2,561,432 million ($106.3 million), representing a decrease of 515.1% from net gain of the third quarter of 2022 and an increase of 321.6% from net loss of the second quarter of 2023. The decrease over net gain of the third quarter of 2022 and increase over net loss of the second quarter of 2023 was mainly attributable to changes in the fair value of currency interest rate swaps contracts, financial liabilities in respect of Dividend Preferred Shares, and warrants.

 

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Net loss was VND15,003,845 million ($622.9 million), representing an increase of 33.7% from the third quarter of 2022 and an increase of 19.7% from the second quarter of 2023.

 

   

Net loss attributable to controlling interest was VND14,986,693 million ($622.1 million), representing an increase of 33.7% from the third quarter of 2022 and an increase of 19.8% from the second quarter of 2023.

 

   

Basic and diluted net loss per ordinary share were both VND6,491 ($0.27), compared with VND4,876 ($0.20) in the third quarter of 2022 and VND5,431 ($0.23) in the second quarter of 2023.

Balance Sheet

 

   

Cash and cash equivalents were VND3,154,673 million ($131.0 million) as of September 30, 2023.

Deliveries

 

     3Q2023      2Q2023      3Q2022  

EV Deliveries (Includes VF e34, VF 5, VF 8, VF 9 and e-bus)

     10,027        9,535        153  

E-scooters Deliveries

     28,220        10,182        13,253  

Showrooms

As of September 30, 2023, we had 126 showrooms globally for EVs and 247 showrooms and service workshops for e-scooters, including VinFast showrooms and dealer showrooms.

Launch of the VF 6 in Vietnam

 

   

On September 29, 2023, we officially introduced our B-segment EV model in Vietnam. The VF 6 is designed by Torino Design and equipped with a wide range of smart features and ADAS Level 2 capabilities. With a reasonable price point, the VF 6 is targeted towards young families.

 

   

The VF 6 is offered in two trims (Base and Plus) at a starting price of VND675 million (approximately $28,000) for the Base trim and VND765 million (approximately $31,800) for the Plus trim, excluding the battery. The expected WLTP driving range is 248 miles and 237 miles for the Base and Plus trims, respectively.

 

   

We started taking orders for the VF 6 in Vietnam on October 20, 2023.

Concrete steps to execute on VinFast’s new business model

 

   

As unveiled during the quarter ended June 30, 2023, we are establishing broad distribution channels, leveraging local networks and the expertise of third-party dealerships and distribution to increase coverage in our expanding list of target markets. We aim for our vehicles to be present in up to 50 global markets and countries by the end of 2024.

 

   

In the U.S., this approach is intended to provide increased consumer access to substantially more states, as compared to a direct-to-customer model. As of September 30, 2023, we have received applications and/or letters of intent from 27 dealers with more than 100 open points across 12 states in the U.S, including Florida, Texas, North Carolina, Virginia, Louisiana, New Jersey and Arkansas, among others.

 

   

To support our dealership partners in growing their store network in the early stage of partnership, VinFast might consider transferring some of our existing showrooms to our dealers.

 

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We continue to maintain and promote our best-in-class after-sales policy in the market. Our local partners in new distribution markets are expected to support the policy and continue to provide a high standard of service for customers and buyers.

 

   

Leveraging local distributors in many of these key markets can offer a capital-light model for expansion that can allow us to be more efficient about capital usage and costs.

Use of discretionary capital expenditures for optimal market expansion

 

   

We have optimized our capital expenditure plan for global manufacturing in 2024 and 2025, which is expected to save approximately $400 million, compared to our earlier plans. These savings are expected to be used towards building CKD factories in Indonesia, the most populous country in Southeast Asia, and India, the third largest auto market in the world, according to Nikkei Asia.

 

   

We aim to access the tremendous potential for increased EV adoption in India and Indonesia where EV penetration is currently only 1%, according to Business Standard and Reuters. The establishment of VinFast facilities in these local markets can provide access to government incentives for local manufacturing, relief from certain tariffs and taxes and access to raw materials at attractive rates.

 

   

Each CKD facility in Indonesia and India has a planned total capacity of up to 50,000 cars per year and an estimated total capital expenditure of $150 million to $200 million in phase 1. Production is expected to commence by 2026.

Expansion of North America charging network

 

   

As of September 30, 2023, we have over 107,000 charging points enabled on our platform in North America, an increase of 10,000 compared to June 30, 2023. This number is expected to grow as we partner with new charging operators, and as our current partners invest in their own network growth.

 

   

Our customers have access to 90% of DC fast chargers available in the public network (excluding Tesla’s) and can benefit from a broad charging network with a promise of convenience and reliability.

 

   

We plan to add new charging operators in California and Washington to our network and are in discussions on potential NACS adoption.

Exchange rates

Unless otherwise stated, all translations from Vietnam Dong to U.S. dollars in “— Recent Developments” were made at the rate of VND24,089 to $1.00, representing the central exchange rate quoted by the State Bank of Vietnam Operations Centre as of September 30, 2023. The Company makes no representation that the Vietnam Dong or U.S. dollars amounts referred could be converted into U.S. dollars or Vietnam Dong, as the case may be, at any particular rate or at all.

Corporate History

We commenced operations in June 2017 in Hanoi, Vietnam, through our Vietnamese subsidiary, VinFast Vietnam. In May 2018, we relocated our head office to Hai Phong, Vietnam. The construction of our electric scooter manufacturing plant was completed in April 2018 and we started production of our first electric scooter model, branded Klara, in November 2018. We broke ground on our automobile manufacturing plant in September 2017 and officially launched the plant in June 2019.

In December 2021, VinFast Vietnam was converted into a joint stock company under the name, VinFast Trading and Production Joint Stock Company (“VinFast Vietnam”).

 

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To facilitate our public offering in the U.S., we established our offshore holding structure through a series of transactions that resulted in VinFast Vietnam’s operations being reorganized under the Singapore-incorporated registrant, VinFast Trading & Investment Pte. Ltd., which changed its name to VinFast Auto Pte. Ltd. in December 2022. VinFast acquired an aggregate 99.9% voting interest in VinFast Vietnam from Vingroup and VIG, who in turn became majority shareholders of the registrant. On July 31, 2023, VinFast converted from a Singapore private limited company operating under the name “VinFast Auto Pte. Ltd.” into a Singapore public limited company operating under the name “VinFast Auto Ltd.” For more information, see “Corporate History and Structure—Reorganization.”

We fully phased out production of ICE vehicles in early November 2022 in connection with our strategic decision to transform into an EV-only manufacturer. As part of this transformation into an EV-only manufacturer, we transferred various ICE Assets (as defined herein) to VIG pursuant to the terms of the ICE Assets Disposal Agreements (as defined herein). We refer to these ICE assets disposal transactions as the “ICE Assets Disposal.” For more information regarding the Reorganization and the ICE Assets Disposal, see “Corporate History and Structure—Phase-out of ICE Vehicle Production.”

Organizational Structure

The following chart summarizes our corporate structure setting forth our ownership interest and the country of incorporation for each of our principal operating subsidiaries as of the date of this prospectus (excluding VinES, which we are in the process of acquiring).

 

 

LOGO

 

Notes:

(1)

Based on proportion of voting power held. VinFast owns 39.09% of this subsidiary’s total outstanding share capital, including non-voting preferred shares.

(2)

Formerly Black Spade Acquisition Co.

(3)

For the purposes of homogenizing the organizational structure of our distribution companies, we are in the process of transferring the shares of VinFast Germany GmbH (“VinFast Germany”) to Vingroup Investment Vietnam JSC (“Vingroup Investment”). Following such transfer, VinFast will own VinFast Germany through Vingroup Investment.

(4)

For the purposes of homogenizing the organizational structure of our US subsidiaries, we are in the process of merging VinFast OEM US Holding, Inc. with Vingroup USA, LLC (“Vingroup USA”), with Vingroup USA as the surviving entity. Following this reorganization, VinFast Manufacturing US, LLC will become a wholly-owned subsidiary of Vingroup USA.

 

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Corporate Information

Our company was incorporated in Singapore on January 19, 2015 as Fiscus Consultancy Pte. Ltd., a private limited company (Company Registration No. 201501874G) under the Companies Act 1967 of Singapore (the “Singapore Companies Act”). Our company’s name was changed to VinFast Trading & Investment Pte. Ltd. on April 8, 2021 and to VinFast Auto Pte. Ltd. on December 22, 2022. On July 31, 2023, VinFast converted from a Singapore private limited company operating under the name “VinFast Auto Pte. Ltd.” into a Singapore public limited company operating under the name “VinFast Auto Ltd.”

Our principal executive offices are located at Dinh Vu—Cat Hai Economic Zone, Cat Hai Islands, Cat Hai Town, Cat Hai District, Hai Phong City, Vietnam. Our telephone number at this address is +84 225 3969999. Our registered office in the Singapore is located at 120 Lower Delta Road, #02-05 Cendex Centre, Singapore 169208.

Investors should submit any inquiries to the address and telephone number of our principal executive offices. Our main website is www.vinfastauto.us. The information contained on our website is not a part of this prospectus. Our agent for service of process in the U.S. is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.

Implication of Being a Foreign Private Issuer

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions of the securities rules and regulations in the U.S. that are applicable to U.S. domestic issuers. Moreover, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. In addition, as a company incorporated in Singapore, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards.

Implication of Being an Emerging Growth Company

As a company with less than $1.24 billion in gross revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups (“JOBS”) Act of 2012, as amended, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We do not plan to “opt out” of such exemptions afforded to an emerging growth company. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross revenues of at least $1.24 billion; (b) the last day of our fiscal year following the fifth anniversary of the closing of the Business Combination; (c) the date on which we have, during the preceding three-year period, issued more than $1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our ordinary shares that are held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

 

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THE OFFERING

 

Ordinary shares offered by Yorkville

An aggregate of 100,800,000 ordinary shares, consisting of (i) 800,000 Commitment Shares; and (ii) up to 100,000,000 ordinary shares that we may, at our discretion, elect to issue to Yorkville under the Yorkville Subscription Agreement from time to time.

 

Last reported sale price of our ordinary shares

On October 19, 2023, the last reported sale price of our ordinary shares as reported on Nasdaq was $5.69 per ordinary share.

 

Ordinary shares issued and outstanding prior to this offering

2,332,229,366 ordinary shares (as of October 19, 2023)

 

Ordinary shares issued and outstanding after giving effect to the issuance of ordinary shares registered hereunder

2,433,029,366 ordinary shares (based on 2,332,229,366 ordinary shares issued and outstanding as of October 19, 2023)

 

Use of proceeds

We will not receive any proceeds from the resale of ordinary shares included in this prospectus by Yorkville. However, we may receive up to $1.0 billion in aggregate gross proceeds under the Yorkville Subscription Agreement from issuances of ordinary shares that we may elect to make to Yorkville pursuant to the Yorkville Subscription Agreement, if any, from time to time in our discretion. As of the date of this prospectus, we are unable to estimate the actual amount of proceeds that we may receive under the Yorkville Subscription Agreement, as it will depend on a number of factors, including the frequency and prices at which we issue ordinary shares to Yorkville, market conditions and the trading price of our ordinary shares, our ability to meet the conditions set forth in the Yorkville Subscription Agreement, and determinations by us as to the appropriate sources of funding for our company and our operations.

 

  We expect to use the net proceeds that we receive from issuances of our ordinary shares to Yorkville, if any, under the Yorkville Subscription Agreement for working capital and general corporate purposes. See “Use of Proceeds” and “Risk Factors — Risks Relating to this Offering — Our management team will have broad discretion over the use of the net proceeds from our sale of ordinary shares to Yorkville, if any, and you may not agree with how we use the proceeds and the proceeds may not be invested successfully.”

 

Risk factors

See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our securities.

 

Market for our ordinary shares

Our ordinary shares are listed on Nasdaq under the symbol “VFS”.

 

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SUMMARY CONSOLIDATED FINANCIAL DATA

The financial information in this prospectus as of December 31, 2021 and 2022 and for the years then ended and as of June 30, 2023 and for the six months ended June 30, 2022 and 2023 has been derived from the consolidated financial statements of VinFast Auto Ltd., which are included elsewhere in this prospectus. The financial statements of VinFast Auto Ltd. are prepared in accordance with U.S. GAAP.

We fully phased out production of ICE vehicles in early November 2022 in connection with our strategic decision to transform into an EV-only manufacturer. Accordingly, our historical results for any prior period are not necessarily indicative of results expected in any future period.

You should read this Summary Consolidated Financial Data section together with the consolidated financial statements included elsewhere in this prospectus and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Summary Consolidated Balance Sheet Data

 

    As of December 31,     As of June 30,  
    2021     2022     2023  
    VND
(in billions)
    VND
(in billions)
   

USD

(in millions)

   

VND

(in billions)

   

USD

(in millions)

 

Cash and cash equivalents

    3,024.9       4,271.4       179.5       1,600.7       67.3  

Inventories, net

    6,683.7       21,607.3       907.9       24,022.1       1,009.3  

Short-term amounts due from related parties

    1,997.2       1,978.1       83.1       391.8       16.5  

Total current assets

    26,692.5       44,838.6       1,884.0       39,202.3       1,647.2  

Property, plant and equipment, net

    51,788.3       57,188.7       2,402.9       63,322.2       2,660.6  

Total assets

    85,321.5       113,605.3       4,773.3       116,828.3       4,908.8  

Amounts due to related parties

    56,035.3       17,325.3       728.0       42,208.0       1,773.4  

Total current liabilities

    87,305.3       66,225.2       2,782.6       91,686.3       3,852.4  

Long-term interest-bearing loans and borrowings

    31,343.1       41,625.0       1,748.9       40,731.0       1,711.4  

Total non-current liabilities

    74,957.4       84,050.6       3,531.5       88,465.9       3,717.1  

Ordinary shares – VinFast Auto Ltd. (2,299,999,998 shares, no par value, issued and outstanding as of December 31, 2022 and June 30, 2023)(1)

    553.9       871.0       36.6       871.0       36.6  

Accumulated losses

    (77,416.9     (127,188.5     (5,344.1     (153,785.0     (6,461.6

Deficit attributable to equity holders of the parent

    (76,926.5     (114,109.8     (4,794.5     (140,703.8     (5,911.9

Non-controlling interests(2)

    (14.7     77,439.4       3,253.8       77,379.9       3,251.3  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deficit

    (76,941.2     (36,670.5     (1,540.8     (63,323.9     (2,660.7

 

Notes:

(1)

In January 2022, the Company effected a 100-for-one split of ordinary shares. On August 1, 2023, the shareholders of the Company approved the consolidation of 2,412,852,458 existing ordinary shares in the capital of the Company (“Existing Shares”) held by shareholders of the Company into 2,299,999,998 ordinary shares in the capital of the Company (the “Consolidated Shares”) without any change in the paid-up share capital amount. All shares and per share amounts presented in the consolidated financial statements have been revised on a retroactive basis to give effect to the share split and the share consolidation.

(2)

Non-controlling interests reflect certain dividend preference shares issued by VinFast Vietnam to Vingroup (i) in March 2022 in return for an advance capital contribution of VND6.0 trillion ($252.1 million) (“DPS1”), (ii) in December 2022 in exchange for VND45,733.7 billion ($1,921.6 million) in borrowings from VinFast Vietnam to Vingroup (“DPS4”) and (iii) as part of our Reorganization in December 2022, in return for the assignment of the Share Acquisition P-Note previously held by Vingroup amounting to VND25.8 trillion ($1,083.3 million) (“DPS3”). For details on the terms of DPS1, DPS3 and DPS4, see note 20 to our consolidated financial statements included elsewhere in this prospectus and also see “Related Party Transactions—Transactions with Vingroup Affiliates—Capital Contributions to VinFast Vietnam.”

 

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Summary Consolidated Statements of Operations

 

     For the Year Ended December 31,      For the Six Months Ended June 30,  
     2021     2022      2022     2023  
    

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

    

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

 

Revenues

             

Sales of vehicles

     13,898.6       12,391.5       520.7        6,080.5       9,024.5       379.2  

Sales of merchandise

     1,405.4       112.2       4.7        46.4       38.3       1.6  

Sales of spare parts and components

     538.2       2,072.6       87.1        1,035.4       372.3       15.6  

Rendering of services

     96.6       222.7       9.4        109.1       173.0       7.3  

Rental income

             

Revenue from leasing activities

     89.4       166.5       7.0        46.3       316.1       13.3  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Revenues (*)

     16,028.2       14,965.6       628.8        7,317.7       9,924.2       417.0  

Cost of vehicles sold

     (23,327.0     (24,660.1     (1,036.1)        (11,329.9     (15,439.2     (648.7

Cost of merchandise sold

     (1,398.3     (151.4     (6.4)        (46.2     (38.5     (1.6

Cost of spare parts and components sold

     (437.2     (1,869.1     (78.5)        (896.2     (230.8     (9.7

Cost of rendering services

     (65.4     (389.6     (16.4)        (133.7     (388.6     (16.3

Cost of leasing activities

     (56.1     (162.3     (6.8)        (44.4     (350.4     (14.7
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Cost of sales

     (25,284.0     (27,232.5     (1,144.2)        (12,450.4     (16,447.5     (691.1
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Gross loss

     (9,255.8     (12,266.9     (515.4)        (5,132.7     (6,523.4     (274.1

Operating expenses:

             

Research and development costs

     (9,255.4     (19,939.9     (837.8)        (10,447.8     (8,620.8     (362.2

Selling and distribution costs

     (2,203.8     (5,213.7     (219.1)        (2,291.6     (2,569.1     (107.9

Administrative expenses

     (2,424.6     (4,010.0     (168.5)        (1,123.3     (2,560.9     (107.6

Compensation expenses

     (4,340.3     (109.4     (4.6)        —        —        —   

Net other operating (expenses)/income

     412.5       (716.4     (30.1)        (615.5     (98.5     (4.1
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Operating loss

     (27,067.4     (42,256.4     (1,775.5)        (19,610.9     (20,372.7     (856.0

Finance income

     446.1       88.1       3.7        79.6       41.3       1.7  

Finance costs

     (4,598.2     (7,959.8     (334.4)        (3,426.9     (5,072.5     (213.1

Net (loss)/gain on financial instruments at fair value through profit or loss

     (1,710.0     1,226.0       51.5        660.3       (1,279.1     (53.7

Investment gain

     956.6       —               —        —        —   

Share of losses from equity investees

     (36.8     —               —        —        —   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Loss before income tax expense

     (32,009.7     (48,902.1     (2,054.7)        (22,297.9     (26,683.1     (1,121.1

Tax (expense)/income

     (209.2     (946.7     (39.8)        (1,014.2     27.0       1.1  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Net loss for the year/period

     (32,219.0     (49,848.9     (2,094.5)        (23,312.2     (26,656.0     (1,120.0

 

(*)

Including sales to related parties in 2021, 2022 and the six months ended June 30, 2022 and 2023 of VND516.5 billion, VND2,378.9 billion ($100.0 million), VND1,169.7 billion and VND5,833.9 billion ($245.1 million), respectively.

 

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Summary Consolidated Cash Flows Data

 

    For the Year Ended December 31,     For the Six Months Ended June 30,  
    2021     2022     2022     2023  
   

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

   

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

 

Net cash flows used in operating activities

    (28,969.1     (35,628.4     (1,497.0     (15,580.7     (21,186.3     (890.2

Net cash flows (used in)/from investing activities

    2,420.1       (16,038.9     (673.9     (5,319.7     (14,258.9     (599.1

Net cash flows from financing activities

    28,855.2       52,945.1       2,224.6       19,798.5       33,417.0       1,404.1  

Net (decrease)/increase in cash, cash equivalents and restricted cash

    2,306.2       1,277.7       53.7       (1,101.9     (2,028.2     (85.2

Cash, cash equivalents and restricted cash at the end of the year/period

    3,024.9       4,271.4       179.5       1,926.5       2,267.7       95.3  

 

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RISK FACTORS

An investment in our ordinary shares involves significant risks. You should consider carefully all of the information in this prospectus, including the risks and uncertainties described below, before making an investment in our ordinary shares. Any of the following risks could have a material and adverse effect on our business, financial condition and results of operations. In any such case, the market price of our ordinary shares could decline, and you may lose all or part of your investment.

Risks Relating to this Offering

It is not possible to predict the actual number of ordinary shares we will issue under the Yorkville Subscription Agreement to Yorkville, or the actual gross proceeds resulting from those issuances. Further, we may not have access to the full amount available under the Yorkville Subscription Agreement.

On October 20, 2023, we entered into the Yorkville Subscription Agreement, pursuant to which Yorkville committed to subscribe for up to $1.0 billion of our ordinary shares, subject to certain limitations and conditions set forth in the Yorkville Subscription Agreement. We have the discretion to issue ordinary shares to Yorkville from time to time in accordance with the terms set forth Yorkville Subscription Agreement.

We generally have the right to control the timing and amount of any issuances of our ordinary shares to Yorkville under the Yorkville Subscription Agreement. Issuances of our ordinary shares, if any, to Yorkville under the Yorkville Subscription Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to issue to Yorkville all, some or none of the ordinary shares that may be available for us to issue to Yorkville pursuant to the Yorkville Subscription Agreement.

Because the subscription price per ordinary share to be paid by Yorkville for the ordinary shares that we may elect to issue to Yorkville under the Yorkville Subscription Agreement, if any, will fluctuate based on the market prices of our ordinary shares prior to each Advance made pursuant to the Yorkville Subscription Agreement, if any, it is not possible for us to predict, as of the date of this prospectus and prior to any such issuances, the number of ordinary shares that we will issue to Yorkville under the Yorkville Subscription Agreement, the subscription price per ordinary share that Yorkville will pay for shares issued by us under the Yorkville Subscription Agreement, or the aggregate gross proceeds that we will receive from those issuances to Yorkville under the Yorkville Subscription Agreement, if any.

Moreover, although the Yorkville Subscription Agreement provides that we may issue up to an aggregate of $1.0 billion of our ordinary shares to Yorkville, only 100,000,000 ordinary shares (excluding the 800,000 Commitment Shares to be issued to Yorkville) are being registered for resale under the registration statement that includes this prospectus. If we elect to issue to Yorkville all of the 100,000,000 ordinary shares (excluding the 800,000 Commitment Shares) being registered for resale under this prospectus, depending on the market price of our ordinary shares prior to each Advance made pursuant to the Yorkville Subscription Agreement, the actual gross proceeds from the sale of all such shares may be substantially less than the $1.0 billion available to us under the Yorkville Subscription Agreement.

If it becomes necessary for us to issue to Yorkville under the Yorkville Subscription Agreement more than the 100,000,000 ordinary shares (excluding the 800,000 Commitment Shares) being registered for resale under this prospectus in order to receive aggregate gross proceeds equal to $1.0 billion under the Yorkville Subscription Agreement, we must file with the SEC one or more additional registration statements to register under the Securities Act the resale by Yorkville of any such additional ordinary shares we wish to issue from time to time under the Yorkville Subscription Agreement, which the SEC must declare effective. Additionally, we would need to obtain shareholder approval to issue ordinary shares in excess of the Exchange Cap under the Yorkville Subscription Agreement in accordance with applicable Nasdaq rules, unless the average per share purchase price paid by Yorkville for all ordinary shares issued under the Yorkville Subscription Agreement equals or exceeds $5.69, in which case, under applicable Nasdaq rules, the Exchange Cap limitation will not apply to issuances of ordinary shares under the Yorkville Subscription Agreement.

 

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The Yorkville Subscription Agreement does not obligate Yorkville to subscribe for or acquire any ordinary shares under the Yorkville Subscription Agreement if those ordinary shares, when aggregated with all other ordinary shares acquired by Yorkville under the Yorkville Subscription Agreement, would result in Yorkville beneficially owning more than 4.99% of the then outstanding ordinary shares.

The issuance of our ordinary shares to Yorkville will cause dilution to our existing shareholders, and the sale of the ordinary shares acquired by Yorkville, or the perception that such sales may occur, could cause the price of our ordinary shares to fall.

The subscription price for the shares that we may issue to Yorkville under the Yorkville Subscription Agreement will fluctuate based on the price of our ordinary shares. Depending on a number of factors, including market liquidity, sales of such ordinary shares may cause the trading price of our ordinary shares to fall.

If and when we do issue ordinary shares to Yorkville, Yorkville may resell all, some, or none of those ordinary shares at its discretion, subject to the terms of the Yorkville Subscription Agreement. Therefore, issuances of ordinary shares to Yorkville by us will result in dilution to the interests of other holders of our ordinary shares.

Investors who buy ordinary shares at different times will likely pay different prices.

Pursuant to the Yorkville Subscription Agreement, we control the timing and amount of any issuances of ordinary shares to Yorkville. If and when we do elect to issue ordinary shares to Yorkville pursuant to the Yorkville Subscription Agreement, Yorkville may resell all, some or none of such ordinary shares in its discretion and at different prices, subject to the terms of the Yorkville Subscription Agreement. As a result, investors who purchase ordinary shares from Yorkville in this offering at different times will likely pay different prices for those ordinary shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the ordinary shares they purchase from Yorkville in this offering as a result of future issuances made by us to Yorkville at prices lower than the prices such investors paid for their ordinary shares in this offering.

Our management team will have broad discretion over the use of the net proceeds from our sale of ordinary shares to Yorkville, if any, and you may not agree with how we use the proceeds and the proceeds may not be invested successfully.

Our management team will have broad discretion as to the use of the net proceeds from our issuance of ordinary shares to Yorkville, if any, and we could use such proceeds for purposes other than those contemplated at the date of this prospectus. Accordingly, you will be relying on the judgment of our management team with regard to the use of those net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used effectively. The failure of our management team to use such funds effectively, if any, could have a negative impact on our business, financial condition, operating results and cash flows.

Risks Relating to Our Business and Industry

We are a growth stage company that has a history of losses, negative cash flows from operating activities and negative working capital.

We had net losses of VND32,219.0 billion, VND49,848.9 billion ($2,094.5 million), VND23,312.2 billion and VND26,656.0 billion ($1,120.0 million) in 2021, 2022 and the six months ended June 30, 2022 and 2023, respectively. We had net cash flows used in operating activities of VND28,969.1 billion, VND35,628.4 billion ($1,497.0 million), VND15,580.7 billion and VND21,186.3 billion ($890.2 million) in 2021, 2022 and the six months ended June 30, 2022 and 2023, respectively. We expect to continue to incur operating and net losses in

 

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the near term as we scale the production of our VF e34 (C-segment), VF 5 (A-segment), VF 6 (B-segment), VF 7 (C-segment), VF 8 (D-segment), VF 9 (E-segment) and VF 3 (mini cars segment) vehicles, establish our manufacturing operations and expand our marketing, sales and service network in our target markets outside of Vietnam.

Our ability to achieve profitability, positive cash flows from operating activities and a net working capital surplus will depend on many factors, including our ability to achieve commercial acceptance, increase utilization of our production capacity to produce EVs in large quantities as planned and increase sales of our EVs in our target markets beyond Vietnam where our operations have historically been focused, including the U.S., Canada, France, Germany, the Netherlands and, in the long-term, elsewhere in Asia and Europe and other factors discussed in this “Risk Factors” section.

Vingroup has issued support letters in connection with the audit of our 2021 and 2022 financial statements and the review of our unaudited interim condensed consolidated financial statements for the six months ended June 30, 2023 to the effect that Vingroup has the ability and will continue to provide financial support sufficient to meet our needs for continued operation, subject to necessary procedures to facilitate such support. Our financial statements have been issued on a going concern basis taking into consideration the support letters, our business plan and the cash and cash equivalents held by our group. The latest support letter is valid from the issuance date of our unaudited interim condensed consolidated financial statements for the six months ended June 30, 2023, until the earliest of the date on which our company obtains adequate third party funding for our capital requirements or the date on which Vingroup ceases to control our company, but in all cases no sooner than the date falling 12 months after the issuance date of the unaudited consolidated interim condensed financial statements for the six months ended June 30, 2023.

We will require significant additional capital to support business growth. We expect to fund our capital requirements through additional debt and equity financing, including related party financing. Such capital might not be available on commercially reasonable terms, or at all, and could, among other things, be burdensome and lead to dilution of your shareholding in our company.

The design, manufacture, sale and servicing of automobiles is a significantly capital intensive business. We had total debt (being our short-term and current portion of long-term interest-bearing loans and borrowings and long-term interest-bearing loans and borrowings, excluding borrowings from related parties) of VND55,901.7 billion ($2,348.8 million) and VND 66,833.4 billion ($2,774.4 million) as of June 30, 2023 and September 30, 2023, respectively. Our debt service obligations for three months ending December 31, 2023 amount to VND3,115.9 billion ($129.4 million). As the Business Combination did not constitute a qualifying liquidity event in respect of our company, holders of $625.0 million aggregate principal amount of Exchangeable Bonds (as defined herein) issued by Vingroup have the right to require Vingroup to redeem the Exchangeable Bonds on or about the second anniversary from the issuance dates of the Exchangeable Bonds. Thereafter, Vingroup will be contractually permitted to exercise its right to require our company to purchase VinFast Vietnam shares that were issued to Vingroup in connection with the issuance of the Exchangeable Bonds. Vingroup’s right to such repurchase should be considered in light of the letters of support that Vingroup has issued to provide financial support sufficient to meet our need for continued operation. We expect to meet our present requirements in respect of working capital, obligations under our loans, borrowings and other financial liabilities and committed capital expenditures primarily by drawing on our Capital Funding Agreement with, and other expected financial support from, Mr. Pham Nhat Vuong and Vingroup, as well as our cash on hand, cash flow from operations, existing third-party loans and borrowings and the net proceeds from the Business Combination. In the next few years, we expect to require a significant amount of additional capital, including working capital, to scale the production of our VF e34 (C-segment), VF 5 (A-segment), VF 6 (B-segment), VF 7 (C-segment), VF 8 (D-segment), VF 9 (E-segment) and VF 3 (mini cars segment) vehicles, our production capacity expansion in both Vietnam and the U.S., showroom roll-out and other items. We will also require a significant amount of additional working capital to support our business expansion in the medium-term.

 

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Our capital requirements will depend on many factors, including, but not limited to:

 

   

our need to develop new features and enhance our products;

 

   

our investments in manufacturing, sales and distribution infrastructure and systems and any capital improvements to our existing infrastructure and systems;

 

   

technological advancements;

 

   

market acceptance of our products and product enhancements, and the overall level of sales of our products;

 

   

our R&D and sales and marketing expenses;

 

   

our ability to control costs;

 

   

our ability to maintain existing manufacturing equipment;

 

   

opportunities for investments, acquisitions and similar actions;

 

   

inflationary pressures and their effect on consumer spending and our ability to obtain financing on commercially acceptable terms;

 

   

general economic conditions in the countries where we manufacture our EVs and in our target markets;

 

   

the effects of international conflicts on the international supply chains and the global economy as a whole; and

 

   

changes in business conditions or other unanticipated developments.

We expect to access equity and/or debt financing available in the public and private markets to meet our present and future working capital and capital expenditure requirements. Raising additional funds through future issuances of equity or convertible debt securities would likely lead to our existing shareholders suffering dilution. For example, on October 20, 2023, we entered into the Yorkville Subscription Agreement, pursuant to which we have the right, but not the obligation, to issue ordinary shares for an aggregate subscription amount of up to $1.0 billion to Yorkville. In addition, any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.

Any debt financing that we may secure in the future may contain covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities and may also be burdensome in terms of increasing interest expenses. In addition, among other macroeconomic factors, an increase in interest rates would adversely affect our ability to secure additional debt financing and would result in higher interest payments. If interest rates remain at elevated levels or continue to rise, it may be more difficult for us to obtain debt financing on terms that are commercially favorable or in line with our budget and expectations, and our interest payments may increase.

Vingroup is our largest shareholder and has provided us with funding in the form of debt financing, corporate loan guarantees, and capital contributions. Vingroup has also issued support letters in connection with the audit of our 2021 and 2022 financial statements, as described above. In addition, we have entered into the Capital Funding Agreement with our Chairman, Mr. Pham Nhat Vuong and the Company Initial Shareholders. We will receive all of the proceeds from any sales of up to 46,293,461 Released Shares by the Company Selling Securityholders pursuant to the First Resale Registration Statement, net of any sales commissions, fees, brokerages, taxes and other related expenses. Such proceeds will be provided to us by the Company Selling Securityholders in relation to the Capital Funding Agreement. Any additional proceeds from such sales by the Company Selling Securityholders will be provided to us as a further grant from the Company Selling Securityholders to us.

We expect to continue to depend, in part, on financing and other support from our affiliates in the future, including to meet our present requirements in respect of working capital, committed capital expenditures and

 

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obligations under our loans, borrowings and other financial liabilities. There can be no assurance that in the future financing from our affiliates will continue to be available to us in sufficient amounts or at all due to their level of indebtedness, other financial obligations or overall funding position, or that, as an alternative to financing from our affiliates, we will be able to obtain third-party debt financing or access the capital markets in a timely manner and on terms that are acceptable to us or at all. For example, we may be unable to access part or all of the amounts available under the Yorkville Subscription Agreement. See “Risk Factors — Risks Relating to this Offering — It is not possible to predict the actual number of ordinary shares we will issue under the Yorkville Subscription Agreement to Yorkville, or the actual gross proceeds resulting from those issuances. Further, we may not have access to the full amount available under the Yorkville Subscription Agreement.” In addition, a number of our financing agreements provide that various payment delays or defaults by Vingroup would constitute a cross default under the terms of our agreements, and therefore an adverse change in Vingroup’s financial condition could impact our debt maturity profile and liquidity requirements.

Our outstanding indebtedness may affect our ability to obtain additional financing to meet our future requirements. Some of our financing arrangements require us and Vingroup, as guarantor, to ensure a collateral cover ratio of at least one times when measured on a quarterly basis. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Description of Certain Indebtedness.” Our collateral cover ratio fell below the required ratio in respect of loans totaling VND29,636.8 billion ($1,245.2 million) and VND2,290.6 billion ($96.2 million) as of September 30, 2022 and December 31, 2022, respectively, and in respect of certain bonds with an outstanding balance amounting to VND13,378.0 billion ($562.1 million) as of March 31, 2023. In each case, the required ratio was subsequently restored. As of September 30, 2023, our collateral cover ratio in respect of loans totaling VND16,253.0 billion ($669.1 million) fell below the required ratio. Although our collateral cover ratio in respect of a loan amounting to VND13,868.0 billion ($571.2 million) was subsequently restored as a result of the appreciation of the value of our collateral, our collateral cover ratio in respect of a loan amounting to VND2,385 billion ($97.9 million) remains below the required ratio. As of the date of this prospectus, we are in the process of restoring the collateral cover ratio in respect of such loan by providing additional assets as collateral pursuant to the relevant contractual agreement. If the value of the collateral securing our borrowings declines in the future, we will be required to provide, or arrange for, additional collateral to ensure our compliance with the terms of these financing arrangements. If we are unable to do so, including due to the inability of Vingroup to provide the support that we require, it may constitute a breach of the terms of our financing arrangements.

Any inability to raise financing on commercially acceptable terms or at all could result in our failure to implement our business plans and strategy or cause us to experience disruptions in our operating activities, and our business, financial condition, results of operations, cash flows and prospects would be materially and adversely affected.

We face risks associated with being a new entrant in the EV industry and the marketing and sale of our EVs in international markets where we only recently began delivering vehicles.

Our company was established in Vietnam in 2017 and commenced the delivery of ICE vehicles in 2019. Our operations prior to 2021 have focused primarily on the manufacture and sale of ICE vehicles and electric scooters. In 2021, we began delivering our first EV model in Vietnam, our VF e34, and in 2022, we began accepting reservations for our second to fourth models, the VF 8, VF 9 and VF 5, with VF 8 deliveries commencing in September 2022 in Vietnam and in March 2023 in the U.S., and VF 9 and VF 5 deliveries commencing in March and April 2023, respectively, in Vietnam.

We have faced and may continue to face many of the risks and challenges typically associated with commencing operations in the relatively new EV industry. We began U.S. deliveries of the VF 8 in March 2023 from our initial U.S. shipment of 999 VF 8 “City Edition” vehicles in both Eco and Plus trims. The “City Edition” was our first version of the VF 8 to go through the relevant testing and approval processes in the U.S. and therefore completed those processes and was available for delivery sooner than the VF 8 (87.7 kWh battery).

 

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We offered a $3,000 discount on the VF 8 “City Edition” to select customers who had made reservations for the VF 8 in the U.S. The “City Edition” is also available on a 36-month lease basis for California residents only. Customers were given the option to receive the “City Edition” at the discounted price or maintain their existing reservation for the VF 8 (87.7 kWh battery). Certain customers who opted to take delivery of the VF 8 “City Edition” may be eligible for the VinFast Lease Forward Program after 12 months of leasing, and subject to the terms and conditions of the program, would be able to exchange their VF 8 “City Edition” for the VF 8 (87.7 kWh battery) with equivalent trim. The Lease Forward Program ended in September 2023. Customers may prefer to wait for the VF 8 (87.7 kWh battery) rather than purchase or lease the “City Edition,” or cancel their reservations entirely. In April 2023, we dispatched a shipment of approximately 1,900 VF 8 (87.7 kWh battery) and we began delivering the VF 8 vehicles from this shipment to North American customers in the second half of 2023 that use battery components that provide a longer driving range than the VF 8 “City Edition.” Deliveries in Europe are expected to begin in the second half of 2023. Further delays in deliveries of the VF 8 (87.7 kWh battery) could potentially lead to increases in cancelations, customer dissatisfaction or negative publicity.

Unforeseen risks associated with moving from an ICE to EV manufacturer could adversely affect us. It may be difficult to predict our future revenues and appropriately budget for our expenses given our relatively limited operating history in the EV industry. Our future success will depend on our ability to continue designing, producing and selling safe, high-quality vehicles as we transition to being an EV-only manufacturer.

In addition, a significant part of our growth strategy entails the marketing and sale of our EVs in markets outside of Vietnam. Our growth strategy will expose us to a number of risks, including, but not limited, to:

 

   

competition with other manufacturers whose brands are more well known in the local target market and who may have more experience and financial resources;

 

   

increased costs associated with developing and maintaining effective marketing, sales and service network and distributing presence in various countries;

 

   

risks associated with establishing and maintaining manufacturing operations in new jurisdictions;

 

   

unanticipated changes in prevailing economic conditions and regulatory requirements, such as rising inflation, interest rate increases by the U.S. Federal Reserve and other central banks, the availability and cost of credit and economic recession or fears thereof;

 

   

challenges related to compliance with different commercial, legal and regulatory requirements of the new markets in which we offer, or plan to offer, our products and services, including the potential for unexpected timing delays and additional costs;

 

   

our ability to expand our charging network, increase the number of available charging stations and charging points, offer fast charging and continue to improve our electric charging infrastructure;

 

   

our ability to offer our EVs and services at attractive prices;

 

   

our ability to adopt new technologies and advance our technological capabilities;

 

   

our ability to effectively manage our intended rapid growth, including increased order volume and the launch and production of multiple new EV models concurrently. For example, we began delivering the VF e34 (C-segment) in 2021, the VF 8 (D-segment) in 2022 in Vietnam and the VF 5 (A-segment) and VF 9 (E-segment) in 2023 in Vietnam, and we plan to begin delivering the VF 6 (B-segment) in 2023, and the VF 7 (C-segment) and the VF 3 in 2024. The successful roll out of multiple vehicles within a short span of time, particularly as a new entrant in the EV industry may subject us to additional risks which could impact our reputation;

 

   

our ability to produce and deliver our EVs on schedule and with the targeted specifications, which may depend on factors beyond our control, including vehicle licensing and safety and other certification processes in our target markets;

 

   

fluctuations in foreign currency exchange rates;

 

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changes in EV subsidy policies in our target markets that adversely affect the availability or level of subsidies to us and/or our ability to compete with domestic EV makers in such markets;

 

   

costs associated with shipping and logistics for transporting our products to end markets;

 

   

failure to develop appropriate risk management and internal control structures tailored to overseas operations;

 

   

different safety concerns and measures needed to address accident-related risks in different countries and regions; and

 

   

trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses.

Any of the factors described above may have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

Our brand, reputation, public credibility and consumer confidence in our business could be harmed by negative publicity, and we may not succeed in growing our brand in markets outside Vietnam.

Our business and prospects are affected by our ability to grow our brand in markets outside Vietnam. We expect that our ability to develop, maintain, and strengthen credibility and confidence in our brand will depend on the acceptance of our vehicles in new markets, our ability to deliver vehicles that meet our target specifications within the announced delivery schedules, general customer satisfaction and the success of our marketing and branding efforts, among other factors.

Our reputation and brand are vulnerable to threats that can be difficult or impossible to predict, control, and costly or impossible to remediate. As a new entrant in the EV industry and Vietnam’s first global EV manufacturer, we have received, and expect our company and our EVs to continue to receive, heightened attention and scrutiny, including in the media in our international target markets and on social media, and particularly as we begin to deliver our vehicles in international markets in larger quantities in 2023 and beyond.

Any negative media or social media coverage, reviews or reviews that compare us unfavorably to competitors could adversely affect our brand, consumer confidence and demand for our vehicles. For example, we have been the subject of negative press in relation to our introduction of the VF 8 “City Edition” in the U.S. market and the VF 8 “City Edition” shorter driving range compared to our forthcoming VF 8 (87.7 kWh battery), delays in U.S. deliveries of the VF 8 and the reduction of our workforce in the U.S. and Canada as we sought to optimize our North America operations. In October 2022, we recalled approximately 700 of our VF e34 vehicles, which we sell exclusively in Vietnam, after being informed by our airbag supplier that certain side impact sensors for the airbags could malfunction. In February 2023, we recalled approximately 2,700 of our VF 8 vehicles sold in Vietnam to repair the bolts that connect the front brake caliper to the steering knuckle in the recalled vehicles, and performed the same repair on other VF 8 vehicles in our global inventory. In May 2023, we recalled 999 of our VF 8 vehicles in the U.S. to install a software update for the vehicle’s multimedia display screen after our routine performance monitoring identified that the display intermittently appeared blank during operation. See “—We may be unable to adequately control the costs associated with our operations.”

Such recalls, whether voluntary or involuntary, and delays in production, shipment and/or delivery of vehicles could harm our reputation, particularly as a new entrant, and discourage additional reservations and vehicle sales, and otherwise materially and adversely affect our business and operations. Negative publicity about us could lead customers to cancel reservations and affect our ability to attract new reservations and to attract and retain suppliers, other business partners, management and key employees, which in turn could adversely affect our reputation, business, and results of operations, even if they are baseless or satisfactorily addressed. These allegations, even if unproven or meritless, may lead to inquiries, investigations, or other legal actions against us by regulatory or government authorities as well as private parties. Any regulatory inquiries or investigations and lawsuits against us, perceptions of inappropriate business conduct by our company or perceived wrongdoing by

 

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any member of our management team, among other things, could substantially damage our reputation and public credibility and cause us to incur significant costs to defend ourself. Any negative market perception or publicity regarding our suppliers or other business partners that we closely cooperate with, or any regulatory inquiries or investigations and lawsuits initiated against them, may also have an impact on our brand, public credibility and customer confidence in our products, or subject us to regulatory inquiries, investigations or lawsuits. Our management may be required to dedicate significant time and we may incur additional costs on marketing activities to respond to negative publicity directed at us and rehabilitate our brand and reputation.

Any negative media publicity about the EV industry or product or service quality problems of other automakers in the industry in which we operate, including our competitors, may also negatively impact our brand, public credibility and consumer confidence by association, and may also affect the value of your investment.

Our long-term results depend upon our ability to successfully introduce and market new products and services, which may expose us to new and increased challenges and risks.

Our growth strategy depends in part on our ability to offer a competitive EV offering relative to our peers and to continue augmenting our “technology for life” offering, increase our global reach to meet demand, innovate our commercial approach, expand our vehicle offerings (including in response to customer and industry feedback), enhance and refine our service offering, pursue enhanced manufacturing automation and capacity expansion, broaden our ancillary revenue streams, pursue organic and inorganic growth opportunities and promote and invest in our ESG initiatives. In particular, pricing and driving range are key competitive factors in the EV industry.

As we introduce new vehicles and services or refine, improve or upgrade versions of existing vehicles and services, we cannot predict the level of market acceptance or the amount of market share these vehicles or services will achieve, if any. We have had delays in our initial delivery targets and cannot assure you that we will not experience material delays in the entry into new markets and the introduction of new products and services in the future. We offered the “City Edition” VF 8 in the U.S. on a one-time, limited basis to commence deliveries of our VF 8 model. The “City Edition” VF 8 has a lower range per charge than VF 8 (87.7 kWh battery) and is being offered at a $3,000 discount to the suggested retail price of the VF 8 (87.7 kWh battery) to encourage customers who have existing reservations of the VF 8 to take delivery of the VF 8 “City Edition” instead of waiting for the VF 8 (87.7 kWh battery). We commenced deliveries of the VF 5 and VF 9 in early 2023 in Vietnam. We also plan to begin delivering the VF 8 (87.7 kWh battery), VF 6 in 2023, and the VF 7 and the VF 3 in 2024. If there are any delays in the delivery of the new versions or models, or they do not perform as expected or otherwise are not well-received by the market, our prospects would be materially and adversely impacted. Consistent with our strategy of offering new vehicles and vehicle refinements, we expect to continue to use a substantial amount of capital for product refinement, research and development, and sales and marketing.

If we are unable to successfully implement our long-term growth strategy, our business, financial condition, results of operations, cash flows and prospects could be adversely affected.

The automotive market is highly competitive, and we may not be successful in competing in this industry.

The automotive industry is highly competitive. We compete on many factors, including pricing, TCO, brand recognition, product quality, features (including driving range) and designs, after-sales policy and manufacturing scale and efficiency.

We compete for sales with established EV manufacturers and new entrants, including established ICE vehicle manufacturers that have entered or are seeking to enter the EV segment, earlier entrants into the EV industry and new EV companies. Some of our competitors may have established market positions, well known brands and relationships with customers and suppliers. Competition for EVs could intensify in the future, including due to

 

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increased demand and a regulatory push for alternative fuel vehicles, continuing globalization, new market entrants into the EV space and consolidation in the worldwide automotive industry. We expect that more competitors will enter the EV market, and these new entrants will further increase competition. Further, we may experience increased competition for components and other parts of our vehicles, which may have limited supply.

We also compete across an array of factors, any of which could affect the competitiveness of our EV offerings, including pricing and total cost of ownership, driving range, brand recognition, product design, after-sales policy and manufacturing scale and efficiency. For example, in January 2023, the EV industry experienced a series of price reductions following the announcement of price cuts by one of the major industry players. We have also decided to offer the VF 8 “City Edition” in the U.S. at a $3,000 discount to the suggested retail price of the VF 8 (87.7 kWh battery) and have also offered the leasing option for the VF 8 “City Edition” at a significantly discounted lease price. We monitor competitive factors on an ongoing basis and may from time to time adjust our prices and provide promotions due to competitive factors beyond our control, such as industry trends and pricing pressure, could adversely affect our margins and profitability.

Competition in automotive industry could further intensify in the future in light of increased demand, continuing globalization and consolidation in the worldwide automotive industry, among other factors. Increased competition may lead to lower sales or further downward pricing pressure on the VF 8 or on other models, which may adversely affect our business, financial condition, results of operations, cash flows and prospects.

We market our EVs in multiple markets that use different driving range testing standards while our EVs are in different stages of development. In addition, the driving range and overall performance of our EVs will depend on many factors beyond our control, including driving habits and conditions. Therefore, the advertised driving range, certified driving range and actual driving performance of our EVs may all differ. As a result, we may be subject to negative publicity, and our business may be adversely affected even if such press is inaccurate.

EVs are required to undergo various testing and approval processes, including driving range certification according to EPA (in the U.S.) or WLTP (in Europe) standards, before they can be sold in a particular market. EPA testing standards typically produce a lower driving range than WLTP testing standards. Marketing and advertising for the EV generally begins before these testing and approval processes are complete and therefore may use internal company estimates of features such as driving range. We have or will promote our EVs using the WLTP or EPA driving range (depending on the market and stage of development), and not necessarily both ranges, in different instances. In addition, the estimated and certified driving ranges of our EVs may differ. Finally, we offer our EVs in various trims that have different performance capabilities (for example, our Plus trim vehicles typically have luxury features than the Eco trim version of the same vehicle, but a lower driving range). Any one or more of these factors related to driving range may attract negative media coverage that can harm our reputation, brand and demand for our EVs and may lead to customer dissatisfaction.

Potential investors should also take note of the section “Presentation of Financial and Other Information,” which explains the presentation of WLTP and EPA driving range data in this prospectus and the inherent limitations to consistency and comparability of that data.

We may be unable to adequately control the costs associated with our operations.

We have devoted significant capital to developing and growing our business, including establishing our manufacturing factory in Vietnam, designing and developing our EV models, the VF e34 (C-segment), VF 8 (D-segment), VF 9 (E-segment), VF 5 (A-segment), VF 6 (B-segment), VF 7 (C-segment) and VF 3 (mini cars segment), purchasing and maintaining equipment and tooling, procuring required parts and raw materials, building our network of sales and servicing infrastructure through our partnerships and developing our charging infrastructure in Vietnam. We expect to incur further costs that will impact our profitability, including costs associated with developing new EV models, upgrading existing models, procuring car components and raw

 

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materials, ramping up production at our manufacturing facility in Hai Phong, establishing new manufacturing facilities, hiring and retaining qualified employees to meet our growing business needs, further expanding our charging infrastructure in Vietnam and internationally and marketing our EVs and our brand in existing and new markets and other after-sale policies. These costs may increase due to many factors, including factors beyond our control, such as higher transportation costs, currency fluctuations, tariffs, inflation and adverse economic or political conditions.

In June 2023, we announced an additional goodwill after-sales policy that provides eligible customers with cash or service vouchers if their vehicles experience a technical issue that requires servicing. The policy applies to our customers in all markets from June 15, 2023 until further notice, and the level of support varies across markets and based on the types of issue.

The prices for parts and raw materials may fluctuate depending on factors beyond our control, including market conditions, inflation, supply chain shortages and global demand for these materials. Inflationary pressures in 2021 and 2022 increased our commodity, freight and raw material costs and the effects of inflation may have an adverse impact on our costs, margins and profitability in the future. Our initiatives to alleviate inflationary pressures may not be successful or sufficient.

In addition, we have been and in the future may be required to recall our EVs for performance or safety-related issues. In October 2022, we recalled approximately 700 of our VF e34 vehicles, which we sell exclusively in Vietnam, after being informed by our airbag supplier that certain side impact sensors for the airbags could malfunction. As of June 30, 2023, we have completed servicing on approximately 90.0% of the recalled VF e34 vehicles. In February 2023, we recalled approximately 2,700 of our VF 8 vehicles sold to retail customers in Vietnam to repair the bolts that connect the front brake caliper to the steering knuckle in the recalled vehicles, and performed the same repair on other VF 8 vehicles in our inventory. As of June 30, 2023, we have completed servicing on approximately 96.0% of the recalled VF 8 vehicles in Vietnam. In May 2023, we recalled 999 of our VF 8 vehicles in the U.S. to install a software update for the vehicle’s multimedia display screen after our routine performance monitoring identified that the display intermittently appeared blank during operation. As of June 30, 2023, we have completed servicing on approximately 30.2% of the recalled VF 8 vehicles in the U.S.

Any future recalls such as these will require us to incur additional costs and, if significant, could have a material adverse effect on our results of operations, financial condition and cash flows. Furthermore, there can be no assurance that we will be willing or able to recover any increased costs by increasing the prices of our EVs. Future increases in the cost of shipping, parts or raw materials could increase our costs and lower our margins. If we are unable to design, develop, manufacture, market, sell, and service our vehicles and provide services in a cost-efficient manner, our margins, profitability, and prospects would be materially and adversely affected.

Our results of operations reflect sales of ICE vehicles in Vietnam even though we ceased production of ICE vehicles and completed the ICE Assets Disposal during that year.

In connection with our strategic decision to transform into an EV-only manufacturer, we have fully phased-out production of ICE vehicles and completed the ICE Assets Disposal to VIG in early November 2022. For more information about the ICE Assets Disposal, see “Corporate History and Structure—Phase-out of ICE Vehicle Production.” Notwithstanding our cessation of ICE vehicle production in early November 2022, our results of operations for 2022 and the six months ended June 30, 2023 include the results of our ICE vehicle manufacturing business because, while we ceased production of ICE vehicles in November 2022, we recognize revenue for each ICE vehicle at the time that the vehicle is delivered to the customer. In addition, we have an insignificant number of ICE vehicles remaining to be sold in Vietnam in 2023.

We have retained all servicing, warranty and other obligations and liabilities related to ICE vehicles that we have produced and we have retained all rights, obligations and liabilities under ICE vehicle-related supplier contracts that we are not able to novate to VIG or other parties outside of our Group. We have incurred and will

 

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incur additional costs associated with break fees or settlement costs related to our outstanding obligations under such contracts, which will be recorded in our consolidated statements of operations as compensation expenses. We have also extended the warranty policy for all ICE vehicles sold and to be sold (which are ICE vehicles that we produced prior to ceasing our ICE manufacturing operations and are scheduled to be delivered) to the earlier of 10 years or the first 200,000 kilometers. Accordingly, we expect to incur costs in the future related to legacy ICE vehicles warranties.

In addition, certain of these ICE vehicle components and spare parts suppliers are also our intended suppliers for our EV vehicles and any differences or disputes in respect of ICE vehicle supply contracts could adversely affect our general business relationship and our ability to acquire necessary EV vehicle parts and components, which in turn could adversely affect our business, financial condition, results of operations, cash flows and prospects.

Our historical results of operations are not, and our past growth may not, be indicative of our future performance or prospects.

This prospectus includes financial information as of December 31, 2021 and 2022 for the years then ended and as of June 30, 2023 and for the six months ended June 30, 2022 and 2023 derived from the consolidated financial statements of VinFast Auto Ltd.

We operated primarily as an ICE vehicle manufacturer prior to 2022. In January 2022, we announced our strategic decision to cease ICE vehicle production to transform into a pure-play manufacturer of EVs. In early November 2022, we fully phased-out production of ICE vehicles and completed the ICE Assets Disposal to our shareholder, VIG. In 2022, while gradually phasing out our legacy ICE vehicle manufacturing operations, we also invested in R&D for new EV models and ramped up production of our EVs, leading to our initial deliveries of the VF e34 and VF 8 in Vietnam. During the year, we also grew our footprint outside of Vietnam by opening reservations for the VF 8 and VF 9 in North America and Europe and making our initial shipment of the VF 8 “City Edition” to the U.S. in December 2022. In early 2023, we commenced delivery of the VF 5 and VF 9 in Vietnam and the VF 8 “City Edition” in the U.S. In April 2023, we dispatched a shipment of approximately 1,900 VF 8 (87.7 kWh battery) and we began delivering the VF 8 vehicles from this shipment to North American customers in the second half of 2023. Deliveries in Europe are expected to begin in the second half of 2023. For these reasons, we believe that our results of operations during the periods presented in this prospectus are not comparable. Moreover, the historical financial information included in this prospectus may not be indicative of our future performance or prospects. We have experienced rapid growth of our business in the past as an ICE vehicle manufacturer with operations focused on our home market of Vietnam where our parent company’s Vingroup brand is well recognized, we offer a range of marketing initiatives and promotions and we believe domestically produced vehicles have certain competitive advantages. There can be no assurance that we will be able to achieve similar rapid growth of our business in our international markets where the business, regulatory and consumer landscapes may differ significantly from Vietnam. As such, our past growth and historical financial results of operations may not be indicative of our future performance or prospects.

We are dependent, directly and indirectly, on suppliers for component parts and raw materials. Suppliers may fail to deliver components and raw materials according to our schedule and at prices, quality and volumes acceptable to us.

We depend on third-party suppliers for key components in our vehicles, including battery packs, axles, chassis, seats, semiconductor chips, interior parts, and steering columns. We also procure raw materials required to manufacture and assemble our vehicles, such as steel, aluminum and resin. Raw materials such as these are also used by our battery cell suppliers. Raw materials may be subject to price fluctuations due to various factors beyond our control, including market conditions and global demand for these materials, which may directly or indirectly, have an adverse impact on our operating costs and profit margins. The supply chain exposes us to multiple potential sources of delivery failure or component shortages.

 

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If suppliers become unable to provide, or experience delays in providing components and raw materials, our business could be disrupted, including our ability to meet our targeted schedules for vehicle deliveries and the rollout of new features. If existing supply agreements are terminated or renewed on less favorable terms, we may face difficulty or delays in finding replacement suppliers able to provide components or other supplies of comparable quality. Any such alternative suppliers may be located a long distance from our manufacturing facilities, which may lead to increased costs or delays, or the terms of such new agreements may be made on less favorable terms. If our manufacturers or suppliers become unwilling or unable to provide an adequate supply of semiconductor chips, with respect to which there has been a global shortage, we would not be able to find alternative sources in a timely manner and our business would be adversely impacted.

We source the battery cells and battery packs in our EVs from third party suppliers. Driving range is a key competitive factor in the EV industry, and our success depends in part on our ability to continue to deliver efficient EVs as we develop future EV offerings. Our success depends, in turn, on the ability of our battery partners to deliver high-quality and high-capacity battery components that will allow us to provide a competitive EV offering in terms of driving range and to do so in quantities that meet our requirements as we grow.

Our battery suppliers include our affiliate, VinES, which is a key battery pack supplier to us and is in the process of developing battery cell production capabilities in Vietnam. On October 11, 2023, we announced our intention to acquire VinES from our Chairman, Mr. Pham Nhat Vuong. While we have not experienced a material disruption in the manufacture of our vehicles due to any shortages in the supply of battery cells, we cannot assure you that we will be able to continue to obtain a sufficient number of battery cells, components or battery packs at a reasonable cost to support our operations. We cannot assure you that VinES, a recently established EV battery supplier, and other third-party suppliers will be able to meet our battery cell and battery pack requirements in the manner that we expect. Furthermore, as we seek to increase our production capacity in the future, the impacts of global supply constraints, if they continue, may be magnified in the future.

Changes in business or macroeconomic conditions, governmental regulations and other factors beyond our control or that we do not presently anticipate could affect our ability to receive components from suppliers. Such events could pose challenges or delays to the construction of, and ramp up at, new facilities, such as our planned manufacturing facility in North Carolina, by adversely impacting the availability or costs of raw materials and components used in the construction of such facilities or production of our vehicles. Under our supply agreements, we have in the past, and could again in the future, be subject to penalties and price adjustments as a result of any volume shortfalls in our orders.

Concerns over inflation, geopolitical issues, global financial markets and the COVID-19 pandemic have led to increased economic instability and expectations of slower global economic growth. For example, following Russian military actions related to Ukraine in February 2022, commodity prices, including the price of oil, gas, nickel, copper and aluminum, have increased. Such disruptions to the global economy, together with inflationary pressures, has at times disrupted, and in the future may disrupt, the global supply chain and affect our ability to secure (or the cost of securing) components, raw materials or other supplier. In the past, global supply chain disruption has in turn adversely impacted the delivery schedule for our vehicles. An increase in raw material costs may require us to increase our product prices, which could adversely impact our price competitiveness. In 2022, as the pandemic-related economic instability eased, the U.S. Federal Reserve started tapering its quantitative easing monetary policies in response to elevated inflation levels (from high food and energy prices and broader pressures) and supply and demand imbalances. The U.S. Federal Reserve raised the benchmark federal-funds rate from near-zero in March 2022 to 5%, to 5.5% in July 2023 and it is possible that the U.S. Federal Reserve will continue to increase the funds rate. The financial conditions of banking institutions have come under severe pressure and deterioration, as exemplified by the proposed restructuring of several banks in the first half of 2023, driven by bank runs or simultaneous withdrawals by depositors due to various reasons, including lack of confidence in the banking system. These developments may adversely impact global liquidity, heighten market volatility and increase U.S. dollar funding costs resulting in tightened global financial conditions and fears of a recession. A prolonged period of extremely volatile and unstable market conditions would likely increase our funding costs and negatively affect market risk mitigation strategies.

 

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Suppliers may experience disruptions in their operations, including due to equipment breakdowns, labor strikes or shortages, shipping container shortages, financial difficulties, natural disasters, component or material shortages, cost increases, acquisitions, changes in legal or regulatory requirements, or other similar problems. The unavailability of any component or supplier could, if not covered by contingency supplier plans, result in delays in production, deliveries and rollouts of new EV models and new features, idle manufacturing facilities, product design changes and loss of access to important technology and tools for producing and supporting our products and services. A portion of our parts and components are obtained through short- and medium-term orders rather than long-term supply agreements. This may expose us to fluctuations in prices of components, materials and equipment.

Semiconductor chips are a vital input component to the electrical architecture of our EVs. There has been a global shortage of semiconductor chips since 2020, due in part to the COVID-19 pandemic and increased demand for consumer electronics that use these chips. Although we have sought to manage the impact of the shortage through proactive inventory management and close collaboration with our suppliers, the shortage has resulted in increased chip delivery lead times and increased costs to source available semiconductor chips, which has led to delays in our production. To the extent this semiconductor chip shortage continues, and we are unable to mitigate the effects of this shortage, we may incur higher production costs and our ability to deliver our vehicles on schedule and in sufficient quantities to fulfill customer reservations and to support our growth through sales to new customers would be adversely affected. In addition, we may be required to incur additional costs and expenses in managing ongoing chip shortages, including additional research and development expenses, engineering design and development costs in the event that new suppliers must be onboarded on an expedited basis. Further, ongoing delays in production and shipment of vehicles due to a continuing shortage of semiconductor chips may harm our reputation and discourage additional reservations and vehicle sales, and otherwise materially and adversely affect our business and operations. Other shortages may occur in the future and the availability and cost of the affected components may be difficult to predict.

Cyber-attacks and malicious internet-based activity directed at supply chains have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems or the third-party information technology systems that support us and our services. Ransomware attacks, including by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of data, and income, reputational harm, and diversion of funds. While we conduct risk assessments and gap analyses and have implemented monitoring and defense solutions for our networks, devices applications, data, system processes and users and designed our EVs to comply with cyber-security standards in the relevant target markets and to offer in-vehicle solutions to protect them from and respond to risks in real time, there can be no assurance that any mitigation measures that we have taken or will take will be successful in preventing or minimizing the consequences of cyber-attacks or similar incidents.

Our success will be dependent upon our ability to maintain relationships with existing suppliers who are critical and necessary to the output and production of our vehicles and to create relationships with new suppliers.

Our success will be dependent upon our ability to maintain our relationships with existing suppliers and enter into new supplier agreements. We rely on suppliers to provide key components and technology for our vehicles. Supplier agreements that we have, and may enter into with key suppliers in the future, may have provisions where such agreements can be terminated in various circumstances, including potentially without cause. In addition, if our suppliers experience substantial financial difficulties, cease operations, or otherwise face business disruptions, we would be required to take measures to ensure components and materials remain available. Any supply chain disruption could affect our ability to deliver vehicles and could increase our costs and negatively affect our liquidity and financial performance.

 

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The process of establishing manufacturing facilities outside of Vietnam, and expanding our capacity within Vietnam, may be subject to delays or cost overruns, may not produce expected benefits or may cause us to not meet our projections for future production capacity.

We are planning to establish manufacturing facilities outside of Vietnam and have identified the U.S. and Indonesia for our initial and subsequent international expansion of our manufacturing activities. In addition, we plan to expand our capacity at our Hai Phong facility. Our ability to meet delivery timelines could be impacted, which would impact our sales volume and could impact our reputation. Construction and expansion of EV manufacturing facilities involve significant risks and capital. Unforeseen events could lead us to adjust our plans and impact our projected production capacity. We could experience construction delays or other difficulties beyond our ability to control or predict. Any failure to complete these capital-intensive projects on schedule and within budget could adversely impact our business, financial condition, results of operations, cash flows and prospects. Construction projects are subject to supervision and approval procedures, including but not limited to project approvals and filings, construction land and project planning approvals, environment protection approvals, pollution and hazardous waste discharge permits, work safety approvals, fire protection approvals and the completion of inspection, acceptance and other applicable procedures by relevant authorities. There may also be delays and foreseen costs in obtaining the relevant licenses, permits and approvals to operate these facilities, which in turn could impact our business, financial condition, results of operations, cash flows and prospects.

Our reservations may not result in completed sales of our vehicles and our actual vehicle sales and revenue generated for our sales could differ materially from the number of reservations received.

Our reservation program for our vehicles requires customers to place a small reservation fee. Each reservation fee is cancellable and fully refundable without penalty until the customer enters into a sale and purchase agreement for the vehicle they select. We have experienced cancelations in the past, and it is possible that a significant number of customers who reserved our vehicles, including corporate customers and third party dealers with multi-vehicle orders as well as customers that have reserved multiple EVs, may not ultimately complete their purchases for any reason, including due to reasons and factors which may be outside of our control, such as rising inflation, deterioration of economic conditions in our end markets, and the availability and cost of consumer credit. We do not typically verify the identity of customers making reservations. Customers who have made reservations may have made reservations for multiple vehicles while deciding which vehicle to ultimately purchase and may continue to evaluate the attractiveness of vehicle pricing and other factors, in each case up until the time they are given the opportunity to place orders. The wait time from the time a reservation is made until the time the vehicle is delivered, and any delays beyond expected wait times, could impact consumer decisions on whether to ultimately make a purchase and result in customer dissatisfaction. From time to time, we have experienced delayed vehicle deliveries which have resulted in customer dissatisfaction, and there can be no assurance that this will not happen again in the future. As we recognize revenue upon the sale of a vehicle at the time the vehicle is delivered to the customer, our reservation numbers may not be indicative of our future revenue generations and prospects. Furthermore, a portion of our reservations represent reservations made by Vingroup employees who receive discounts on interest payments with respect to vehicle financing as employees of Vingroup-affiliated companies. As a result, our historical pace of attracting reservations may not be indicative of our pace of attracting reservations in the future.

Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt EVs, which may be affected by various factors, including developments in EV or alternative fuel technology.

Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt EVs. Demand for EVs may be affected by many factors, such as factors directly impacting EV prices or the cost of purchasing and operating EVs such as sales and financing incentives, prices of raw materials and parts and components, cost of petroleum and governmental regulations, including tariffs, import regulations, evolving technical regulations and standards, and other taxes. Concerns over global economic conditions, stock market volatility, energy costs, geopolitical issues, inflation and central banks’ decisions to increase interest rate increases in response, the

 

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availability and cost of credit, and slowing of economic growth and forecasts of a recession in our target markets and the global economy may dampen demand for EVs. Demand for EVs may also be adversely affected by increases in demand for ICE vehicles relative to demand for EVs, which in turn may be driven by many factors. Volatility in EV demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition, results of operations, and cash flows.

The market for EVs is still evolving, characterized by changing EV and alternative fuel technologies, a competitive pricing environment, evolving government regulations and industry standards, and changing consumer demands and behaviors. We may be unable to keep up with changes in EV technology or alternatives to battery-generated electricity as a fuel source and, as a result, our competitiveness may suffer. Developments in alternative fuel technologies, such as hydrogen, ethanol, fuel cells, or compressed natural gas, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Existing and other battery cell technologies, fuels or sources of energy may emerge as consumer’s preferred alternative to our vehicles. As technologies change, we will need to source and integrate the latest technology into our vehicles. The introduction and integration of new technologies into our vehicles may increase our costs and capital expenditures required for the production and manufacture of our vehicles. Any failure by us to cost efficiently implement new technologies or adjust our manufacturing operations could adversely affect our business, prospects, financial condition, results of operations, and cash flows.

If there is inadequate access to EV charging stations or related infrastructure, our business may be materially and adversely affected.

Demand for our vehicles will depend in part upon the availability and quality of our charging infrastructure. In Vietnam, we face risks associated with owning and operating our EV charging station network and must ensure that our network reach and infrastructure is sufficient to meet our customers’ needs. Outside of Vietnam, we market our VinFast Power Solutions program and our ability to provide our customers with stress-free charging services, including access to a network of charging stations through strategic partnerships. In the U.S., we rely on our partners, Electrify America and EVgo, to provide our U.S. customers with charging solutions at their networks of EV charging stations.

Our partners’ charging infrastructure could be impacted by challenges such as:

 

   

logistics issues, including any delays or disruptions in the provision of charging services at the charging stations;

 

   

integration with electronic payment platforms;

 

   

successful integration of our EVs with third-party charging networks;

 

   

inadequate capacity or over capacity in certain areas, security risks or risk of damage to vehicles, charging equipment or real or personal property;

 

   

obtaining any required permits, land use rights and filings;

 

   

the potential for lack of customer acceptance of our partners’ charging solutions; and

 

   

the risk that government support for EV and alternative fuel solutions and infrastructure may not continue.

While the prevalence of charging stations generally has been increasing, charging station locations are currently less widespread than gas stations in all of our target markets. The lack of more widespread charging infrastructure could lead to potential customers choosing not to purchase our EVs. Although we intend to establish far-reaching charging networks in our target markets, we and our charging solutions partners may be unable to expand our charging networks as fast as we intend or as the public desires, or to place the charging stations in places our customers believe to be optimal. There can be no assurance that our partners will continue

 

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to work with us on terms acceptable to us, or at all. To the extent we or our charging solutions partners are unable to meet customer expectations or experience difficulties in providing charging solutions, our reputation and business may be materially and adversely affected. If we are unable to meet user expectations or experience difficulties in providing our charging solutions, our business, financial condition, results of operations, cash flows and prospects may be materially and adversely affected.

The unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for EV manufacturers and buyers could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

Any reduction, elimination, alteration, ineligibility, unavailability or discriminatory application of government subsidies, favorable trade policies and free trade agreements and economic incentives that we currently or expect to receive may result in the diminished competitiveness of the alternative fuel and electric vehicle industry generally or our vehicles. In particular, we benefit from favorable tax concessions in Vietnam and the U.S. For example, in Vietnam, we are entitled to corporate income tax incentives for investment projects in certain economic zones under Vietnam’s Law on Investment and the Law on Corporate Income Taxes (and its implementing regulation). As a result of such tax incentives, for the years ended December 31, 2021 and 2022 and the six months ended June 30, 2023, VinFast Vietnam was entitled to a preferential tax rate of 10% and CIT exemption, resulting in an effective tax rate of 0% . These income tax incentives will be phased out gradually over the years until 2033. The phase-out and expiry of the corporate income tax incentives may adversely affect our results of operations. Conversely, applicable laws may impose additional barriers to electric vehicle adoption, including additional costs and adversely affect the growth of the alternative fuel automotive markets and our business, financial condition, results of operations, cash flows and prospects. Incentives may also be put in place which benefit alternative technologies, which could adversely impact demand for EVs.

In certain markets, customers may also benefit from government incentives for the purchase of electric vehicles in the form of rebates, tax credits and other financial incentives. These governmental rebates, tax credits and other financial incentives may lower customer purchase costs or provide savings in connection with the purchase of EVs or use of EV infrastructure. For example, the IRA provides tax credits in connection with the purchase of certain EVs through 2032. However, in order for the purchase of an EV to qualify for such credits, the EV must satisfy certain requirements, including, among others, that a specified percentage of the value of the battery components in the EV be manufactured or assembled in the U.S., the final assembly of the vehicle be conducted in the U.S., the retail price of the vehicle not exceed a specified threshold which varies by vehicle type and eligible taxpayers must have incomes below certain thresholds. In 2022, we entered into a series of agreements with North Carolina state and local authorities to build a manufacturing facility spanning across a site measuring approximately 733 hectares in North Carolina. Commissioning of the facility is targeted for 2025. Once this facility commences operations and final assembly of our EVs, our customers in the U.S. may be able to be entitled to this tax credit, subject to, among other things, their income eligibility as well as our ability to meet requirements on battery components and critical minerals. We are monitoring the issuance of the detailed guidance on these requirements by the Internal Revenue Service (“IRS”) and will be evaluating the guidance’s implications on our supply chain ecosystem in order to satisfy such requirements. If purchases of our EVs are not able to qualify for tax credits under the IRA, demand for our EVs may decrease. There is uncertainty as to the expected benefit or impact from the IRA due to the IRA’s eligibility criteria related to consumer income, battery components and critical minerals. In addition, under the IRA, qualifying used EVs will also be eligible for a tax credit, which could cut into the sales of new EVs. Further, to the extent our vehicles now or in the future benefit from incentives, incentives may take time to be disbursed and may not impact customer purchase decisions as expected. Incentives may also expire on specified dates, end when the allocated funding is no longer available, or be reduced or terminated as a matter of regulatory or legislative policy. There is no guarantee that the rebates, tax credits or other financial incentives for alternative energy production, alternative fuel, and EVs which have been made available will be available in the future. If current tax incentives are not available in the future, demand for EVs may stagnate or decline, which could adversely affect our business, financial condition, results of operations, cash flows and prospects.

 

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If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately and timely report our financial condition, results of operations or cash flows, which may adversely affect investor confidence.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. We commenced the process of documenting and testing our control procedures in the fourth quarter of 2022 in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, and during the course of this assessment we may identify certain weaknesses and deficiencies in our control over financial reporting other than those summarized below. Beginning with our second annual report following the consummation of the Business Combination, we will be required pursuant to SEC rules to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified by our management in internal control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board (“PCAOB”), a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely basis. In addition, our independent registered public accounting firm will be required to formally attest to and report on the effectiveness of our internal control over financial reporting pursuant to the SEC rules commencing the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an “emerging growth company” (“EGC”) (as defined in the JOBS Act). See “—Risks Relating to Being a Public Company—We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.” At the time when we are no longer an EGC, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal controls are designed, documented, operated or reviewed. Remediation efforts may not enable us to avoid a material weakness in the future.

Although efforts to document, test, evaluate and remediate our internal control over financial reporting are in progress, there is a risk that we will not be able to conclude, within the prescribed timeframe, that our internal control over financial reporting is effective as required by Sarbanes-Oxley Act Section 404. Testing and maintaining internal control may divert our management’s attention from other matters that are important to our business. During the evaluation and testing process, we may identify one or more material weaknesses in internal control over financial reporting, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with the SEC rules or our independent registered public accounting firm may not issue an unqualified opinion. If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could cause the price of our ordinary shares to decline and could subject us to investigation or sanctions by the SEC. Failure to remedy any material weakness in internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict future access to the capital markets. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

We have identified material weaknesses in our internal control over financial reporting. If our remediation of such material weaknesses is not effective, or if we experience additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements and comply with applicable laws and regulations could be impaired.

Although we are not yet subject to the certification or attestation requirements of Section 404 of the Sarbanes-Oxley Act, in connection with the audit of our consolidated financial statements as of December 31,

 

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2022 and for the year then ended, our management and our independent registered public accounting firm identified deficiencies that represented material weaknesses in our internal control over financial reporting. The material weaknesses identified by management related to (i) insufficient comprehensive accounting policies and procedures to facilitate preparation of U.S. GAAP consolidated financial statements and (ii) insufficient financial reporting and accounting personnel with appropriate knowledge, skills, and experience in the application of U.S. GAAP and the SEC rules to prepare consolidated financial statements and related disclosures completely and accurately.

We have adopted a remediation plan to address the material weaknesses identified above. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Internal Control over Financial Reporting” for details of our remediation plan. Material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period and management has concluded, through testing, that these controls are operating effectively.

We cannot assure you that we will successfully implement our remediation plan, or that our remedial efforts will be sufficient to address the control deficiencies that led to the material weaknesses in internal control over financial reporting, or that they will prevent potential future material weaknesses or control deficiencies. If our remediation efforts are not successful or other material weaknesses or control deficiencies are identified in the future, the accuracy and timing of our financial reporting may be adversely affected, and consequently we may be unable to file timely periodic reports in compliance with securities laws and stock exchange listing requirements, which may diminish investor confidence in our financial reporting and our share price may decline.

Additionally, we have not performed an evaluation of our internal control over financial reporting as permitted under the JOBS Act; accordingly, we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, beginning with our second annual report after the consummation of the Business Combination.

Our vehicles currently make use of lithium-ion battery cells; lithium-ion battery cells have been observed to catch fire or vent smoke and flame.

The battery packs in our EVs make use of lithium-ion cells. On rare occasions, lithium-ion cells have been reported to vent smoke and flames in a manner that can ignite nearby materials. If the battery packs in our EVs experience failure, it could subject us to lawsuits, product recalls, or redesign efforts, all of which would be time consuming and expensive. In addition, negative public perceptions regarding the suitability of lithium-ion cells for automotive use or any future incident involving lithium-ion cells such as a vehicle or other fire, even if not involving our vehicles, could seriously harm our business. In addition, we store lithium-ion cells at our EV manufacturing facilities, which could prove hazardous if not stored and handled properly, resulting in damages, injuries or adverse publicity. Moreover, any failure of a competitor’s electric vehicle or energy storage products may indirectly cause indirect adverse publicity for our industry as a whole, us and our products. Such adverse publicity could negatively affect our brand and harm our business, financial condition, results of operations, cash flows and prospects.

We collaborate with a range of third parties, including for certain business partners for key aspects of our business, and any failure of these partners to deliver their services adequately will adversely impact our business, operations, reputation, results of operations and prospects.

We contract with third parties to provide certain products and services to our customers. The battery packs in our EVs are supplied by VinES and other third parties. The charging network access that we provide in international markets are owned and managed by third party charging network infrastructure providers. In Vietnam, although we provide our own charging stations, we rely on third party infrastructure providers for

 

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support of our charging network services and equipment, and may also engage third parties to provide certain after-sales services, such as body repairs and roadside assistance. We have entered into arrangements with financial institutions to provide consumer financing for our EVs. We plan to partner with third parties for after-sales services during our initial expansion outside of Vietnam, including roadside and off-road assistance and collision repairs.

Although we take care to select our third-party business partners and contractors, we cannot control their actions. If our vendors fail to perform as we expect, our operations and reputation could suffer if the failure harms the vendors’ ability to serve us and our customers. One or more of these third-party vendors may experience financial distress, staffing shortages or liquidity challenges, file for bankruptcy protection, go out of business, or suffer disruptions in their business. We may not be able to renew or enter into new arrangements with our third-party providers on terms satisfactory to us. If we successfully grow our business as expected, our third-party providers will be required to meet increased requirements from us as we seek to serve greater customer demand.

We also depend, directly and indirectly, on third-party construction contractors for the expansion of our manufacturing capacity. We plan to construct manufacturing facilities in the U.S. and expand the capacity at our manufacturing facility in Hai Phong, Vietnam. In part to support our battery requirements, VinES has completed the construction of and has begun operating their battery pack assembly facility in Ha Tinh, Vietnam which expands its battery pack production capabilities beyond its existing facilities in Hai Phong, Vietnam. In addition, VinES is developing a second lithium cell facility in Ha Tinh, Vietnam, in collaboration with Gotion. Any delay or deficiency in the work of such third-party contractors could, directly or indirectly, have a material and adverse effect on our business, operations and prospects.

The use of third-party vendors represents an inherent risk to us that could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.

We may experience issues with the recycling of our lithium-ion cells and battery modules, which may harm our business and reputation.

Our business requires us to dispose of battery components used in the production of our EVs. Our ability to appropriately and efficiently handle the recycling of our lithium-ion cells and battery modules will depend on our and our partners’ ability to develop and put in place efficient and low-cost recycling capabilities and processes that meet future recycling needs.

Our research and development efforts may not yield expected results.

Technological innovation is critical to our success. We have developed some of our technologies in-house, and we also collaborate with third-party business partners, including our affiliates in the Vingroup technology ecosystem, for the design and continued development of our EV offerings. We have invested in our research and development efforts and expect to continue doing so in the future. Research and development activities are inherently uncertain, and there can be no assurance that we will continue to achieve technological breakthroughs and successfully commercialize such breakthroughs. A delay in the development or regulatory approval (if applicable) of technologies for our new EV models could delay our expected timelines to bring new vehicles to market or to provide upgrades to existing models or generally fail to meet customer demand, which would in turn damage our brand and reputation, adversely affect our business, financial condition, results of operations, cash flows and prospects and cause liquidity constraints.

 

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Our vehicles rely on software and hardware that is highly technical, and if these systems contain errors, bugs, vulnerabilities, or design defects, or if we are unsuccessful in addressing or mitigating technical limitations in our systems, or if we are unable to coordinate with vendor and suppliers in a timely and effective manner, our business could be adversely affected.

Our vehicles rely on software and hardware that is highly technical and complex and may require modification and updates over the life of the vehicles. In addition, our vehicles depend on the ability of such software and hardware to store, retrieve, process and manage data. Our software and hardware may contain errors, bugs, vulnerabilities or design defects, and our systems are subject to certain technical limitations that may compromise our ability to meet our objectives. For example, in May 2023, we recalled 999 of our VF 8 vehicles in the U.S. to install a software update for the vehicle’s multimedia display screen after our routine performance monitoring identified that the display intermittently appeared blank during operation. Some errors, bugs, vulnerabilities, or design defects inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Although we will attempt to remedy any issues we observe in our vehicles effectively and rapidly, such efforts may not be timely, may hamper production or may not be to the satisfaction of our customers.

Additionally, we expect to periodically deploy updates to the software (whether to address issues, deliver new features or make desired modifications). If our OTA update procedures fail to properly update the software or otherwise have unintended consequences to the software, the software within our customers’ vehicles will be subject to vulnerabilities or unintended consequences resulting from such failure of the OTA update until properly addressed. If those remote updates fail, cause malfunctions, do not function as anticipated or have unintended consequences, the functionality of our customers’ EVs and the safety of users of the vehicle could become compromised. Such OTA updates must also comply with applicable regulations and standards.

In the design, development and production of our vehicles, we utilize third-party software and complex technological hardware, some of which are licensed to us pursuant to licensing agreements and others which we have acquired from experienced business partners through technology transfer transactions. The development and implementation of such technologies in our EVs is inherently complex and requires that we coordinate with our business partners, vendors and suppliers to integrate such technology into our EVs and ensure the interoperability of the various parts. If we are unable to develop the software and technology systems necessary to operate our vehicles, our competitive position could be harmed. We may also fail to detect defects and errors that are subsequently revealed, and our control over the performance of third-party services and systems may be limited.

The occurrence of software or hardware issues or other difficulties involving our technology or other systems can adversely impact the customer experience and result in customer dissatisfaction with our vehicles. If we are unable, particularly as a new entrant to the EV industry, to prevent or effectively remedy errors, bugs, vulnerabilities or defects in our software and hardware, or fail to deploy updates to our software properly or otherwise achieve customer satisfaction, we would suffer damage to our reputation, loss of customers, loss of revenue or liability for damages, any of which could adversely affect our business, prospects, financial condition, results of operations, and cash flows.

Our warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our business, financial condition, results of operations, cash flows and prospects.

We provide a manufacturer’s warranty on all new vehicles at the time of sale as well as a warranty on batteries in our EVs. In addition, notwithstanding the sale of the ICE Assets to VIG, the liabilities continue to rest with us. Pursuant to the warranties associated with the ICE vehicles, we are responsible for servicing the ICE vehicles and handling the warranty claims over the life of the warranty. We have extended the warranty policy for all ICE vehicles sold and to be sold (which are ICE vehicles that we produced prior to ceasing our ICE manufacturing operations and are scheduled to be delivered) to the earlier of 10 years or the first 200,000 kilometers. We also offer a warranty for battery of 10 years, together with our battery subscription program for

 

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the duration of the battery lease, which may be longer than the warranty period under our outright sale model. Our battery subscription program will provide for replacement or repair in case the battery capacity falls under 70% for the duration of the battery lease.

We maintain a warranty reserve for these obligations. The amount of the warranty reserve represents our best estimate of the projected costs to repair or replace items under warranties, as well as the nature and frequency of future claims. We cannot assure you that the warranty reserves that we maintain will be sufficient to fully cover claims that may arise. In addition, given the durations of our vehicle manufacturer’s warranty offering of up to 10-year / 125,000-mile and battery warranty under the battery subscription program, we may encounter unforeseen or higher costs. We could, in the future, become subject to significant and unexpected warranty claims, resulting in significant expenses, which would in turn materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.

If our vehicle owners customize our vehicles with aftermarket products, or attempt to modify our vehicles’ charging systems, the vehicles may not operate properly, which may create negative publicity and could harm our brand and business.

Automotive enthusiasts may seek to alter our vehicles to modify their performance which could compromise vehicle safety and security systems. Also, customers may customize their vehicles with aftermarket parts that can compromise driver safety. We do not test, nor do we endorse, such changes or products. In addition, customers may attempt to modify our vehicles’ charging systems or use improper external cabling or unsafe charging outlets that can compromise the vehicle systems or expose our customers to injury from high voltage electricity. Such unauthorized modifications could reduce the safety and security of our vehicles and any injuries resulting from such modifications could result in adverse publicity, which may negatively affect our brand and thus harm our business, financial condition, results of operations, cash flows and prospects.

We may be subject to risks associated with autonomous driving technologies.

Our vehicles are being designed with connectivity for an autonomous hardware suite and will offer some autonomous functionality, such as lane change and remote parking. Autonomous driving technologies are subject to risks and there have been accidents and fatalities associated with such technologies. The safety of such technologies depends in part on driver interactions, and drivers may not be accustomed to using or adapting to such technologies. To the extent accidents associated with our autonomous driving systems occur, we could be subject to liability, negative publicity, government scrutiny, and further regulation. Moreover, any incidents related to autonomous driving systems of our competitors could adversely affect the perceived safety and adoption of our vehicles and autonomous driving technology more broadly. Any of the foregoing could materially and adversely affect our business, prospects, financial condition, results of operations, and cash flows.

Autonomous driving technology is also subject to considerable regulatory uncertainty as the law evolves to catch up with the rapidly evolving nature of the technology itself, all of which are beyond our control. Our vehicles also may not achieve the requisite level of autonomy required for certification and rollout to consumers or satisfy changing regulatory requirements which would require us to redesign, modify or update our autonomous hardware and related software systems.

Our business depends on the continued efforts of our people and our ability to recruit new talent and our operations may be disrupted if we lose their services.

Our success depends on the continued efforts of our people, including our key management and employees with expertise in various areas. We had turnover in some of our key management and other personnel in the past, including certain senior executives in 2021 and 2022. In addition, we consolidated our North America operations in February 2023, which resulted in turnover in country-level management and other personnel. If our personnel are unable or unwilling to continue their services with us, we might not be able to replace such personnel in a

 

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timely manner or without incurring additional costs or we might not be able to find replacements with appropriate experience. The automotive industry is characterized by high demand and intense competition for talent, and as we build our brand and become more well-known outside of Vietnam, the risk that competitors or other companies may seek to hire our talent could increase. In addition, we may need to expend significant time and expense to train new employees that we are required to hire.

We may be compelled to undertake product recalls or other actions, which could adversely affect our reputation and brand, and our business, financial condition, results of operations, cash flows and prospects.

We may be subject to adverse publicity, damage to our brand, and costs for recalls of our vehicles. In October 2022, we recalled approximately 700 of our VF e34 vehicles, which we sell exclusively in Vietnam, after being informed by our airbag supplier that certain side impact sensors for the airbags could malfunction. The recall procedure entails the replacement of the airbag’s side impact sensor and reconfiguration of the airbag control module. As of June 30, 2023, we have completed servicing on approximately 90.0% of the recalled VF e 34 vehicles. The costs related to the recall will be borne by the supplier, including the costs of work performed at our service shops in Vietnam. In February 2023, we have recalled approximately 3,800 of our VF 8 vehicles sold to retail customers in Vietnam to repair the bolts that connect the front brake caliper to the steering knuckle in the recalled vehicles, and performed the same repair on other VF 8 vehicles in our inventory. As of June 30, 2023, we have completed servicing on approximately 96.0% of the recalled VF 8 vehicles in Vietnam. In May 2023, we recalled 999 of our VF 8 vehicles in the U.S. to install a software update for the vehicle’s multimedia display screen after our routine performance monitoring identified that the display intermittently appeared blank during operation. As of June 30, 2023, we have completed servicing on approximately 30.2% of the recalled VF 8 vehicles in the U.S.

Although we do not believe our results of operations have been directly materially affected by these recalls, we cannot assure that these recalls will not lead to other adverse consequences or reputational harm. In the future, we may at various times, voluntarily or involuntarily, initiate a recall if any of our vehicles, including any systems or parts sourced from our suppliers, prove to be defective or non-compliant with applicable laws and regulations. Such recalls, whether voluntary or involuntary, could involve significant expense and could adversely affect our brand image in our target markets, as well as our business, financial condition, results of operations, cash flows and prospects.

Pandemics and epidemics, natural disasters, terrorist activities, political unrest and other geopolitical risks could disrupt our production, delivery, and operations, which could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.

Global pandemics, epidemics, or fear of spread of contagious diseases, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt our business operations, reduce or restrict our supply of materials and services, incur significant costs to protect our employees and facilities, or result in regional or global economic distress, which may materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. Actual or threatened war, terrorist activities, political unrest, civil strife, and other geopolitical risks could have a similar adverse effect on our business, financial condition, results of operations, cash flows and prospects. Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.

In February 2022, Russian military forces launched a military action in Ukraine. The ongoing military action between Russia and Ukraine, sanctions and other measures imposed against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic by the U.S. and other countries and bodies around the world, as well as the existing and potential further responses from Russia or other countries to such sanctions, tensions and military actions, has in the past and in the future could continue to adversely affect the global economy and financial markets and could adversely affect our business,

 

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financial condition and results of operations. Additional potential sanctions and penalties have also been proposed and/or threatened. Although our operations have not experienced material and adverse impact on supply chain, cybersecurity or other aspects of our business from the ongoing conflict between Russia and Ukraine, during times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. We cannot predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the conflict, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market disruptions could be significant, could result in increases in commodity, freight, logistics and input costs and could potentially have substantial impact on the global economy and our business for an unknown period of time.

In August 2022, Nancy Pelosi, the former Speaker of the U.S. House of Representatives, visited Taiwan despite comments in opposition of the visit from the People’s Republic of China (“PRC”) government. The PRC government subsequently conducted military exercises in the region and imposed a ban on certain exports and imports with Taiwan. Against this backdrop, we cannot assure you that future developments in the relationship between mainland China and Taiwan will not adversely affect our supply chain, our industry and the global economy and our business, financial condition and results of operations.

Our servers and data are located in data centers that have implemented data protection and disaster recovery measures and protocols, backup systems and redundancies. Nevertheless, fires, earthquakes, floods, typhoons, power loss, telecommunication failures, break-ins, riots, terrorist attacks or other similar events at the sites of our service providers may still cause damage or interruption to our systems and operations. Any of the foregoing events may give rise to interruptions, damage to our property, delays in production, breakdowns, system failures, technology platform failures, or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our business, financial condition, results of operations, cash flows and prospects.

We will be subject to risks associated with foreign exchange rate fluctuations and interest rate changes.

We intend to operate in numerous markets worldwide and as such will be exposed to risks stemming from fluctuations in currency and interest rates. Our exposure to currency risk is mainly linked to differences in the geographic distribution of our manufacturing and commercial activities, resulting in cash flows from sales being denominated in currencies different from those of purchases or production activities. We also import some supplies and components used in the manufacture of our EVs. Meanwhile our use of various forms of financing to cover future funding requirements for our activities, including loans and borrowings denominated in foreign currencies, further expose us to variable rates of interest and foreign exchange rate fluctuations, which can affect our net revenues, finance costs and margins. As of December 31, 2022 and June 30, 2023, 63.9% and 54.8% of our total debt (which consists of our short-term and current portion of long-term interest-bearing loans and borrowings and long-term interest-bearing loans and borrowings, excluding borrowings from related parties) was denominated in U.S. dollars, 35.9% and 45.2% was denominated in Vietnamese Dong and 0.2% and nil was denominated in euros, respectively. An increase in interest rates will increase our debt service obligations in respect of existing borrowings. As of December 31, 2022 and June 30, 2023, VND53,617.4 billion ($2,252.8 million) and VND55,288.9 ($2,323.1 million), or 95.4% and 98.9% of our total debt had floating interest rates, respectively. Although we may manage risks associated with fluctuations in currency and interest rates through financial hedging instruments, fluctuations in currency or interest rates could have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows.

In addition, we intend to offer financing of our vehicles to potential customers through a third-party financing partner or partners and are subject to risks of interest rate changes that affect the availability of affordable consumer credit. For example, in the U.S., in response to rising rates of inflation, the Federal Reserve Board increased the benchmark federal funds interest rates multiple times in 2022, and has signaled that there

 

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may be additional federal funds interest rate increases during 2023. This rising rate environment and the speed with which it has been occurring could negatively impact our customers’ desire or ability to obtain financing to purchase or lease our vehicles.

Risks Relating to Our Relationship with Vingroup

Our corporate actions that require shareholder approval will be substantially controlled by our controlling shareholders who will have the ability to control or exert significant influence over such matters, which may prevent you and other shareholders from influencing significant decisions and reduce the value of your investment.

Vingroup, VIG and Asian Star hold equity interests of 50.8%, 33.0% and 14.7% in our company, respectively. Each of these shareholders is majority owned by our Chairman, Mr. Pham Nhat Vuong. While our business will be managed by, or under the direction or supervision of, our directors, as long as these shareholders and our Chairman continue to control shares representing a majority of our voting power, they will generally be able to determine the outcome of all corporate actions requiring shareholder approval, and control or exert significant influence on the composition of the board of directors. If our controlling shareholders do not dispose of their ordinary shares, they could retain control over us for an extended period of time or indefinitely. Our controlling shareholders may decide to sell a significant portion of our ordinary shares to a third party, including to one of our competitors, thereby giving that third party substantial influence over our business and our affairs. Such a sale could be contrary to the interests of our other shareholders. Business opportunities may arise that are attractive to us and our controlling shareholders’ other interests, and there can be no assurance that our controlling shareholders will direct those opportunities to us. Instead, our controlling shareholders may seek to direct us to engage with Vingroup affiliates instead of unrelated third parties. We do not have any non-competition agreements in place with any of our affiliates, and as a result, although we believe Vingroup intends to conduct its EV business solely through us, Vingroup or its affiliates could in the future, provide products or services which compete with ours.

Our Global CEO, Ms. Le Thi Thu Thuy, also holds the position of Vice Chairwoman of Vingroup. This relationship could create, or appear to create, conflicts of interest when faced with decisions with potentially different implications for us and our Vingroup affiliates.

Because our controlling shareholders’ interests may differ from the interests of our other shareholders, actions taken by our controlling shareholders may be more favorable to those shareholders than to us or our other shareholders. This concentration of ownership may also discourage, delay or prevent a change in control of our company. As a result, the substantial control of our controlling shareholders over our company may reduce the value of your investments.

We have relied on Vingroup for financial support and are dependent on Vingroup affiliates for key aspects of our business. Accordingly, we have engaged in various related party transactions with Vingroup, and any potential conflicts of interest or unfavorable market conditions or adverse business operation of Vingroup and Vingroup affiliates could have an adverse effect on our business and results of operations. Due to our close association with Vingroup and its affiliates, we could also be impacted by matters affecting their reputation, including litigation, regulatory or other matters.

We have relied on our parent company, Vingroup, for financial support. Vingroup and its affiliates have been our key investors since inception, and have made significant investments in us, including in the form of debt financing, corporate loan guarantees and capital contributions. Between 2017 and September 30, 2023, Vingroup, its affiliates, and external lenders have deployed approximately $10.7 billion to fund our operating expenses and capital expenditures. In addition, we have entered into the Capital Funding Agreement with our Chairman, Mr. Pham Nhat Vuong and the Company Initial Shareholders. For details, see “Related Party Transactions.” We will receive all of the proceeds from any sales of up to 46,293,461 Released Shares by the Company Selling

 

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Securityholders pursuant to the First Resale Registration Statement, net of any sales commissions, fees, brokerages, taxes and other related expenses. Such proceeds will be provided to us by the Company Selling Securityholders in relation to the Capital Funding Agreement. Any additional proceeds from such sales by the Company Selling Securityholders will be provided to us as a further grant from the Company Selling Securityholders to us.

We depend on Vingroup affiliates for key aspects of our business, including the provision of technology services and R&D by affiliates in the Vingroup technology ecosystem. We also sublease the site in Hai Phong, Vietnam where our main manufacturing facility is located, from Vinhomes Industrial Zone Investment Joint Stock Company (“VHIZ JSC”). We obtain certain shared management assistance services and license key intellectual property used in our business from Vingroup, including our trade name, our logo, our EV names, such as VINFAST VF 5, VINFAST VF 6, VINFAST VF 7, VINFAST VF 8 and VINFAST VF 9, and our e-scooter names, such as Klara, Theon, Feliz and VinFast Evo 200 and the industrial design for our VF 9 model.

We have also relied on Vingroup and its affiliates for a number of other commercial arrangements. These include loans from and to Vingroup and its affiliates, leases of retail and advertising spaces, procurement of goods and services related to information security and technology, raw materials and spare parts and social and other services such health care and education that we provide as employee benefits and compensation. We also expect to rely on related parties for construction to increase the manufacturing capacity of our facilities. We derived a portion of our revenue from sales of goods and spare parts (battery related) to VinES and sales of e-buses to Vinbus Ecology Transport Services Limited Liability Company (“VinBus”) and sales of electric vehicles to GSM. We may in the future enter into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests.

Our affiliate, VinES, which we intend to acquire, is a key battery pack supplier to us and also is expected to manufacture battery cells and include those battery cells in the battery packs that they supply to us in the future. VinES faces similar new entrant risks that we face as a new entrant in the EV industry. See “—Risks Relating to Our Business and Industry—We face risks associated with being a new entrant in the EV industry and the marketing and sale of our EVs in international markets where we only recently began delivering vehicles.” VinES will also provide consulting and management services for battery-related matters for batteries that we purchase from VinES as well as third-party battery suppliers, including technology consulting, the supply of resources, network building, pricing of input materials and battery products, battery testing and development, contract negotiation, registration and application for battery certification and recycling solutions. For details, see “Related Party Transactions—Transactions with Vingroup Affiliates—Agreements with VinES Relating to the Battery Business.”

While the fees generated by Vingroup and its affiliates for these services are not material in the context of Vingroup’s consolidated annual turnover, if such agreements are terminated or we are unable to renew the agreements on similar or favorable terms, or to secure an alternative supplier or service provider, our business could be materially disrupted and our results of operations, financial condition and prospects could be materially and adversely affected.

In addition, we benefit from various co-marketing programs and cross-promotional activities with Vingroup affiliates. For example, as part of its promotional and appreciation campaign to new and existing homebuyers, Vinhomes Joint Stock Company (“Vinhomes”) has provided customers with gifts, including but not limited to VinFast vouchers. Vingroup has also purchased VinFast vouchers to distribute to new and existing homebuyers as part of its promotional campaigns for its real estate projects. VinFast vouchers may be used towards payment for the purchase of our vehicles in Vietnam. To date, a significant proportion of our historical vehicle sales which have primarily been ICE vehicles, have been made with the application of a VinFast voucher provided to the customers by Vinhomes. In 2022 and for the six months ended June 30, 2023, revenue from sales of EVs to customers applying VinFast vouchers provided by Vinhomes accounted for approximately 14% and 24% of total revenue from sales of EV, respectively. There is no assurance that such programs will continue or will be

 

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repeated, and the demand for, and sales of, our vehicles could be adversely affected in the absence of such co-marketing programs. See “Related Party Transactions—Transactions with Vingroup Affiliates—Cross-Promotional Activities.” As a Vingroup subsidiary, our reputation is linked to an extent with Vingroup and its affiliates. As such, any event or publicity that adversely affects the business or reputation, including litigation, regulatory or other matters, of Vingroup or any of its affiliates, could also have an adverse impact on our brand and reputation, even if such event or publicity is not associated with our products and services. We may incur additional costs in addressing such matters regardless of merit or outcome. This may also divert our management’s time and attention. In addition, we, Vingroup and its affiliates could be adversely impacted by events or reports impacting the industries in which we or Vingroup and its affiliates operate even if such events or reports are not directly related to us or our affiliates.

Transactions with the entities in which related parties hold ownership interests present potential for conflicts of interest, as the interests of these entities and their shareholders may not align with the interests of our company and our unaffiliated shareholders with respect to the negotiation of, and certain other matters related to, our purchases from and other transactions with such entities. Conflicts of interest may also arise in connection with the exercise of contractual remedies under these transactions, such as default.

Risks Relating to Information Technology, Cybersecurity and Data Privacy

We utilize third-party service providers to support our service and business operations and any disruption or delays in service from these third-party providers could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.

Our brand, reputation and ability to attract customers depends on the reliable performance of our vehicles and the supporting systems, technology, and infrastructure. For example, we outfit our vehicles with in-vehicle services and functionality that use data connectivity to monitor performance and capture opportunities for cost-saving preventative maintenance. The availability and effectiveness of these services depend on the continued operation of information technology and communication systems. We rely on leading third party providers to host our cloud computing and storage needs. We do not own, control, or operate our cloud computing physical infrastructure or their data center providers. Although we have put in place disaster recovery plans, including the use of multiple cloud service providers spread out across different locations, our systems and operations are still vulnerable to damage or interruption from, among others, fire, flood, power loss, natural disasters, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, system vulnerabilities, earthquakes and other events at the sites of such providers. Ransomware within our information systems could target our manufacturing and/or business capabilities limiting the availability and uptime of these systems or eliciting payment from us. The occurrence of any of the foregoing events could result in damage to systems and hardware or could cause them to fail completely, and our insurance may not cover such events or may be insufficient to compensate us for losses that may occur.

Problems faced by our third-party cloud service providers with their telecommunications network providers with which they contract or with the systems by which they allocate capacity among their customers, including us, could adversely affect the experience of our customers. Our third-party cloud service providers could decide to close their facilities without adequate notice resulting in loss of service and negative effects in our systems. Any financial difficulties, such as bankruptcy reorganization, faced by our third-party providers or any of the service providers with whom they contract may have negative effects on our business, the nature and extent of which are difficult to predict.

Business interruption insurance that we may carry in the future may not be sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business, which may result from interruptions in our service as a result of system failures. Any errors, defects, disruptions or other performance problems with our services could harm our business, financial condition, results of operations, cash flows and prospects.

 

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Breaches in data security, failure of information security systems and privacy concerns could subject us to penalties, damage our reputation and brand, and adversely impact our business, financial condition, results of operations, cash flows and prospects.

We and our suppliers and service providers may face challenges with respect to information security and privacy, including in relation to the collection, storage, transmission and sharing of information. We and our suppliers and service providers collect, transmit and store confidential and personal and sensitive information of our employees and/or customers, including names, accounts, user IDs and passwords, vehicle information, and payment or transaction related information. We are also subject to certain laws and regulations, such as “Right to Repair” laws, that require us to provide third-party access to our network and/or vehicle systems. In addition, our EVs are connected to the internet and are accessible by various persons, whether remotely or in person, including by technicians during car maintenance services, and we may integrate our service providers’ software or services into our systems and applications, all of which further heighten the risk of breaches of our EVs’ security systems and unauthorized access to personal data stored in the EV systems.

Increasingly, companies are subject to a wide variety of attacks on their networks and information technology infrastructure on an ongoing basis. Traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, employee theft or misuse, denial of service attacks, ransomware attacks and sophisticated nation-state and nation-state supported actors engage in intrusions and attacks that create risks for our (and our suppliers’) internal networks, vehicles, infrastructure, and cloud deployed products and the information they store and process. In addition, hardware, components and software that are produced by us or third parties and utilized in our EVs may contain design or manufacturing defects that could unexpectedly interfere with the operation or security of our EVs.

Although we have implemented security measures to prevent such attacks, our networks and systems may be breached due to the actions of outside parties, employee error, malfeasance, a combination of these, or other causes, and as a result, an unauthorized party may obtain access to our systems, networks, or data. If a threat actor is able to hack into our EV systems, the safety of the EV and its passengers may become at risk. We and our suppliers have in the past been subject to ransomware and phishing attacks. Though we do not believe we experienced any material losses or any sensitive or material information was compromised, we were unable to determine conclusively that this was the case. We have implemented remedial measures in response to such incidents. We cannot guarantee that such measures will prevent all incidents in the future.

We work with various third-party suppliers and service providers in the course of operating our business, and we depend on such third parties to take appropriate measures to protect the security and integrity of their information and systems. We cannot assure you that the measures taken by our third-party suppliers and service providers will be effective.

We and our third-party suppliers and service providers may face difficulties or delays in identifying or otherwise responding to any attacks or actual or potential security breaches or threats. A breach in our data security or that of our suppliers or service providers could create system disruptions or slowdowns and provide malicious parties with access to information stored on our networks, resulting in data being publicly disclosed, altered, lost, or stolen, which could subject us to liability and adversely impact our business, financial condition, results of operations, cash flows and prospects. Further, any breach in our data security or those of our third-party suppliers and service providers could allow malicious parties to access sensitive systems, such as our product lines and the vehicles themselves. Such access could adversely impact the safety of our employees, our customers and third parties.

Furthermore, cybersecurity organizations around the world have published warnings of increased cybersecurity threats to businesses, and external events, like the conflict between Russia and Ukraine, may increase the likelihood of cybersecurity attacks. We and our suppliers and service providers may be subject to retaliatory cyberattacks by state or non-state actors in response to economic sanctions and other political actions taken by governments in the North America or Europe where we operate.

 

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Any actual, alleged or perceived failure to prevent a security breach or to comply with our cybersecurity policies or cybersecurity-related legal obligations, failure in our systems or networks, or any other actual, alleged or perceived data security incident we or our suppliers or service providers suffer, could result in damage to our reputation, negative publicity, loss of customers and sales, loss of competitive advantages over our competitors, increased costs to remedy any problems and provide any required notifications and consents, including to regulators and/or individuals, and otherwise respond to any incident, claims, regulatory investigations and enforcement actions, costly litigation, administrative fines and other liabilities. We would also be exposed to a risk of loss or litigation and potential liability under laws, regulations and contracts that protect the privacy and security of personal data. We may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs and fees, diversion of internal resources, and reputational harm.

In addition, we may incur significant financial and operational costs to investigate, remediate and implement additional tools, devices and systems designed to prevent actual or perceived security breaches and other security incidents, as well as costs to comply with any notification obligations resulting from any security incidents. Any of these negative outcomes could adversely impact the market perception of our products and customer and investor confidence in our company, and would materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.

We retain certain information about our customers, which may subject us to customer concerns or various privacy and consumer protection laws.

We use our vehicles’ electronic systems to log certain information about each vehicle’s use, such as location, charge time, battery usage, mileage and driving behavior, among other things, in order to aid us in vehicle diagnostics and repair and maintenance, as well as to help us customize and optimize the driving and riding experiences. Our customers may object to the use of this data, which may harm our reputation and business. Possession and use of our customers’ driving behavior and data in conducting our business may subject us to legislative and regulatory burdens in Vietnam and other jurisdictions that could require notification of data breach, restrict our use of such information, and hinder our ability to acquire new customers or market to existing customers. If customers allege that we have improperly released or disclosed their sensitive personal data, we could face legal claims, lawsuits and reputational harm. If third parties improperly obtain and use sensitive personal data of our customers, we may be required to expend significant resources to resolve these problems.

As we expand our operations internationally, we will be required to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal information in the U.S., Canada, Europe and elsewhere. See “Regulation.” Such regulations may impose additional regulatory obligations regarding the handling of personal information and further provide certain individual privacy rights to persons whose data is processed. Data protection and privacy-related laws and regulations are evolving and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. We are monitoring these developments, but we may, in addition to other impacts, experience additional costs associated with increased compliance burdens and restrictions on the conduct of our business and the manner in which we interact with our customers.

Failure to comply with applicable laws and regulations could result in regulatory enforcement actions against us. For example, our misuse of or failure to secure personal information could result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and/or result in significant liability and damage to our reputation and credibility. These possibilities, if borne out, could have a negative impact on revenues and profits. If a third party alleges that we have violated applicable data privacy laws, we could face legal claims, damages and administrative fines as well as reputational harm among consumers, investors, and strategic partners.

 

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Any unauthorized control or manipulation of our vehicles’ systems could result in a loss of confidence in us and our vehicles and harm our business.

Our vehicles contain complex technology systems. We have designed, implemented, and tested security measures intended to prevent cybersecurity breaches or unauthorized access to our information technology networks, our vehicles and their systems, and intend to implement additional security measures as necessary and to comply with the relevant standards of our target markets, such as ISO 21434:2021, UNECE R-155 and R-156 regulations on the safety of connected vehicles. However, hackers and other malicious actors may attempt in the future to gain unauthorized access to modify, alter, and use networks, vehicle software and our systems to gain control of, or to change, our vehicles’ software or to gain access to data stored in or generated by the vehicle. Errors and vulnerabilities, including zero day vulnerabilities, in our information technology systems will be probed by third parties and could be identified and exploited in the future, and our remediation efforts may not be timely or successful. Any unauthorized access to or control of our vehicles or their systems or any unauthorized access to or loss of data could result in risks to our customers and other third parties, unsafe driving conditions, or failure of our systems, any of which could result in interruptions in our business, legal claims or proceedings which may or may not result in our favor and could subject us to significant liability. In addition, regardless of their veracity, reports of unauthorized access to our vehicles, their systems or data, as well as other factors that may result in the perception that our vehicles, their systems or data are capable of being “hacked” and lack appropriate safety controls, could negatively affect our brand and harm our business, financial condition, results of operations, cash flows and prospects.

Risks Relating to Regulations and Litigation

We are subject to evolving laws, regulations, standards and policies, and any actual or perceived failure to comply could harm our reputation and brand, subject us to significant fines and liability, or otherwise adversely affect our business.

The laws, regulations, standards and policies are continuously evolving. The costs of compliance, including remediation of any discovered issues and any changes to our operations mandated by new or amended laws, may be significant, and any failures to comply could result in additional expenses, delays or fines. As we expand our business into the target markets, we are in the process of reviewing the applicable laws and regulations in each jurisdiction, including required approvals, licenses and permits. Such laws, regulations, standards and policies continue to rapidly change, which increases the likelihood of a patchwork of complex or conflicting regulations, or which could adversely increase our compliance costs or otherwise affect our business.

All vehicles sold must comply with applicable standards, including mandated safety standards, in each market where our vehicles are sold. Vehicles must pass various tests and undergo certification and processes before being delivered to consumers. Our manufacturing facilities may be subject to scheduled and unscheduled inspections by government agencies. Failure by us to satisfy motor vehicle standards and relevant certification and approval requirements would materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. We are not able to predict with certainty the duration or outcome of testing (including EPA range testing), approval, licensing and permitting processes that our vehicles undergo in our target markets. Adverse outcomes or unexpected delays in these processes have in the past required, and could in the future require, us to adjust our rollout or delivery schedules and could adversely impact our business. Such developments, in turn, could result in negative publicity or adversely affect our brand and reputation.

Our business plan includes the direct sale of vehicles to retail consumers. The laws governing licensing of dealers and sales of motor vehicles vary from jurisdiction to jurisdiction. For example, in the U.S., most states require a dealer license to sell new motor vehicles within the state, and many states prohibit manufacturers from being a licensed dealer and directly selling new motor vehicles to retail consumers. The application of these types of laws to our operations continues to be difficult to predict but could pose operational challenges for us in the future. We and others in our industry may face legal challenges to this distribution model, including from car dealers and their lobbying organizations. Because laws vary from jurisdiction to jurisdiction, our distribution

 

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model must be carefully established, and our sales and service processes must be continually monitored for compliance with the various state requirements, which change from time to time. Regulatory compliance and likely challenges to the distribution model may add to the cost of our business.

Our business could be adversely affected by trade tariffs, export control laws or other trade barriers.

Our business could be affected by the imposition of tariffs, export control laws and other trade barriers, which may make it more costly or difficult for us to export our vehicles to the imposing country. We will become subject to additional tariffs, laws and barriers as we enter into new markets. We may experience cost increases as a result of existing or future tariffs, and may not be able to pass on such additional costs to our customers, or otherwise mitigate the costs. In the event that we raise prices to help cover the higher costs, we may face lower demand for our exported vehicles. A violation of export control laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal penalties, collateral consequences, remedial measures and legal expenses. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects.

Misconduct by our employees could expose us to legal liabilities, reputational harm and/or other damages to our business.

Our employees play critical roles in ensuring the safety and reliability of our products and services and/or our compliance with relevant laws and regulations. Certain of our employees have access to sensitive information (including customer data) and/or proprietary technologies and know-how. We cannot assure you that our employees will always abide by the terms of their labor contracts, our codes of conduct, policies and procedures nor that the precautions we take to detect and prevent employee misconduct will always be effective. If any of our employees engage in any misconduct, illegal or suspicious activities, including but not limited to, misappropriation or leakage of sensitive client information or proprietary information, we and such employees could be subject to legal claims and liabilities and our reputation and business could be adversely affected as a result. In addition, while we seek to effectively screen candidates during the recruitment process, we cannot assure you that we will be able to uncover misconduct of job applicants that occurred before we offered them employment, or that we will not be affected by legal proceedings against our existing or former employees as a result of their actual or alleged misconduct.

We may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings. If the outcomes of these proceedings are adverse to us, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

Except as disclosed in “Business—Legal Proceedings,” we are currently not party to any material legal or administrative proceedings. However, in light of the nature of our business, we and our management are susceptible to potential claims or disputes. We and certain of our management have been, and may from time to time in the future be, subject to or involved in various claims, disputes, lawsuits and other legal and administrative proceedings. Lawsuits and litigations may cause us to incur defense costs, utilize a significant portion of our resources and divert management’s attention from our day-to-day operations, any of which could harm our business. Claims arising out of actual or alleged violations of law, breach of contract or torts could be asserted against us by customers, business partners, suppliers, competitors, employees or governmental entities in investigations and legal proceedings.

We may become subject to product liability claims, which could harm our business, financial condition, results of operations, cash flows and prospects if we are not able to successfully defend or insure against such claims.

The automotive industry experiences significant product liability claims, including in respect of defects in or malfunctions of batteries leased under our battery subscription program, and we face inherent risk of exposure to claims in the event our vehicles do not perform as expected or malfunction resulting in property damage,

 

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personal injury or death. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim, even if unsuccessful, could generate substantial negative publicity about our vehicles and business. A product liability claim could also slow or prevent commercialization of our future vehicle candidates which would have a material adverse effect on our brand, business, prospects and operating results. Any lawsuit seeking significant monetary damages may have a material adverse effect on our brand and reputation, and our business, financial condition, results of operations, cash flows and prospects.

Our insurance coverage strategy may not be adequate to protect us from all business risks.

We have limited liability insurance coverage for our products and business operations. While we currently carry commercial general liability, commercial automobile liability, product liability, excess liability, workers’ compensation, employment practices liability and directors’ and officers’ insurance policies, and plan to cover all mandatory insurance policies, we cannot be certain that our insurance coverage will be sufficient to cover all future claims against us and any other business-related risks, including any losses resulting from product defects, fires, natural calamities or acts of God. Any imposition of liability that is not covered by our existing insurance, or is in excess of our existing insurance coverage could harm our business operations and results.

A successful liability claim against us due to injuries or other costs suffered by our customers could generate substantial negative publicity about our vehicles and materially and adversely affect brand and reputation, as well as our business, financial condition, results of operations, cash flows and prospects. In addition, we do not have any business disruption insurance. Any business disruption event could result in substantial cost to us and diversion of our resources.

We are subject to various environmental, health and safety laws and regulations that could impose substantial costs on it and cause delays in expanding our production facilities.

Our operations are subject to environmental laws and regulations in the jurisdictions where we operate, including laws relating to the use, handling, storage, disposal of and human exposure to hazardous materials. Environmental, health and safety laws and regulations are complex and may require significant time, management attention and costs to ensure continued compliance. Changes in these laws or other new environmental, health and safety laws and regulations may require us to change our operations, potentially resulting in a material adverse effect on our business, financial condition, results of operations, cash flows and prospects. These laws can give rise to liability for administrative oversight costs, cleanup costs, property damage, bodily injury, fines and penalties. Violations of these laws could result in substantial fines and penalties, third-party damages, suspension of production, remedial actions or a cessation of our operations. Contamination at properties we own or operate or properties to which we send hazardous substances may result in liability for us under environmental laws and regulations.

Our operations are also subject workplace safety laws and regulations, which require compliance with various workplace safety requirements, including requirements related to environmental safety. These laws and regulations can give rise to liability for oversight costs, compliance costs, bodily injury (including workers’ compensation), fines, and penalties. Additionally, non-compliance could result in delay or suspension of production or cessation of operations. The costs required to comply with workplace safety laws can be significant, and non-compliance could adversely affect our production or other operations, which could have a material adverse effect on our business, prospects and results of operations.

As we expand into new markets, we will become subject to additional environmental, health and safety laws and regulations. We may incur additional costs to ensure compliance with such laws and regulations, as well as to manage local labor practices.

 

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Increasing scrutiny and changing expectations from our investors, customers and employees with respect to our ESG practices may impose additional costs on us or expose us to new or additional risks.

Investors, customers, employees, regulators and other stakeholders have expressed increasing interest in our ESG practices. Such practices may be taken into consideration by investors in making their investment decisions, and they may not invest in us if they believe that our ESG practices are inadequate or may invest in our competitors if our ESG practices are perceived to be less robust than that of our competitors. The criteria by which companies ESG practices are assessed are subject to change. We may be subject to heightened scrutiny from stakeholders and other third parties in respect of our ESG performance, and we may be required to undertake costly initiatives to maintain a positive ESG outlook or to satisfy any new criteria. Our brand and reputation may be adversely affected if we fail to meet applicable ESG standards or fail to maintain our rating. In addition, our competitors may achieve similar or better ratings than us in the future.

We may be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions, and similar laws, and noncompliance with such laws can subject us to administrative, civil, and criminal penalties, collateral consequences, remedial measures, and legal expenses, all of which could adversely affect our brand and reputation and our business, financial condition, results of operations, cash flows and prospects.

We are or will be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (“FCPA”) and other anti-corruption laws and regulations. The FCPA prohibits us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. A violation of these laws or regulations could adversely affect our brand and reputation and business, financial condition, results of operations, cash flows and prospects. Our policies and procedures designed to ensure compliance with these regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible.

Non-compliance with applicable anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations, contractual breaches, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. In addition, changes in economic sanctions laws in the future could adversely impact our business and investments in our ordinary shares.

Our company and our subsidiaries are subject to international trade restrictions imposed by various jurisdictions, which can include economic sanctions and export controls imposed by the United States, other target markets of our company and our subsidiaries, and other applicable jurisdictions, and the failure of our company and our subsidiaries to comply with such restrictions could adversely affect our reputation and results of operations.

Our company and our subsidiaries are subject to trade restrictions imposed by governments around the world to the extent that such authorities have jurisdiction over the operations of our company and our subsidiaries. These restrictions include economic and trade sanctions administered and enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of State, and the European Union, export controls administered and enforced by the U.S. Department of Commerce, as well as similar trade restrictions administered and enforced by governmental authorities in our company and our

 

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subsidiaries’ other target markets outside of Vietnam. Such laws and regulations prohibit or restrict certain operations, trade practices, investment decisions, and partnering activities, including dealings with certain countries or territories, and with certain designated persons.

If our company and our subsidiaries fail to comply with applicable trade restrictions, we could be subject to penalties or other remedial measures. In addition, the employees, dealers or independent export/import companies of our company and our subsidiaries may engage in conduct for which we and our subsidiaries might be held responsible and expose them to reputational harm. Further, internal or governmental investigations could be expensive and disruptive. Our company and our subsidiaries cannot assure that the policies and procedures that they have designed and implemented to promote compliance with applicable trade restrictions will be effective in preventing possible violations, including violations related to the unauthorized diversion of vehicles to countries, territories or persons that are the target of economic sanctions or other international trade restrictions.

We are subject to taxation in multiple jurisdictions. Tax laws in these jurisdictions are often complex and require us to make subjective determinations that may be scrutinized by tax regulators.

We are subject to many different forms of taxation in each of our countries of operation, including income tax, withholding tax, property tax, VAT and other payroll-related taxes. Tax law and administration is complex, subject to change and varying interpretations and often requires Global Blue to make subjective determinations. Relevant tax authorities in such jurisdictions may not agree with the terminations that are made or the positions taken by us with respect to the application of tax law. Such disagreements could result in lengthy legal disputes, an increased overall tax rate applicable to us and, ultimately, in the payment of substantial amounts of tax, interest and penalties, which could have a material adverse effect on our business, results of operations and financial condition.

Additional tax expenses could accrue in relation to previous or subsequent tax assessment periods, which are still subject to a pending tax audit or have not been subject to a tax audit yet. We have open tax years from 2020 to 2022 with tax authorities in various jurisdictions. Tax authorities in such countries could revise original tax assessments and substantially increase the tax burden (including interest and penalty payments) of the relevant entities. They may have the authority to review and adjust net operating loss or tax credit carryforwards that were generated prior to these periods if utilized in an open tax year. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, character, timing or inclusion of revenue and expenses or the sustainability of income tax credits for a given audit cycle. The realization of any of these risks could have a material adverse effect on our business, results of operations and financial condition.

Risks Relating to Intellectual Property

Our use of open source software in our applications could subject our proprietary software to general release, adversely affect our ability to sell our services and subject us to possible litigation, claims or proceedings.

We use open source software in connection with the development and deployment of our products and services, and we expect to continue to use open source software in the future. Companies that use open source software in connection with their products have, from time to time, faced claims challenging the use of open source software and/or compliance with open source license terms. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms. Some open source software licenses may require users who distribute proprietary software containing or linked to open source software to publicly disclose all or part of the source code to such proprietary software and/or make available any derivative works of the open source code under the same open source license, which could include proprietary source code. In such cases, the open source software license may also restrict us from charging fees to licensees for their use of our software. While we monitor the use of open source software and try to ensure that open source software is not used in a manner that would subject our proprietary source code to these requirements and restrictions, such use could inadvertently occur, in part because open source license terms are often ambiguous and have generally not been interpreted by U.S. or foreign courts.

 

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We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. We rely on a combination of owned, jointly owned and licensed patents, trade secrets (including those in our know-how), copyrights, service marks, trademarks and other rights granted by intellectual property laws, as well as employee and third-party nondisclosure agreements, intellectual property licenses and other contractual rights to establish and protect our technology and intellectual property rights. While Vingroup has registered our tradename, logo and V line design worldwide, our EV and e-scooter names have only been registered in our target markets, while the industrial designs for various EV models have only been submitted and registered in various key markets. Thus, our intellectual property rights may not be enforceable across various international jurisdictions and may be challenged, contested, circumvented or invalidated by third parties.

The occurrence of any of the foregoing events may result in limitations in the scope of our intellectual property or restrictions on our use of our intellectual property rights or may adversely affect the conduct of our business. Despite our efforts to protect our owned, jointly owned and licensed intellectual property rights, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken or will take to prevent misappropriation may not be successful. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources. Failure to adequately protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which would adversely affect our business, financial condition, results of operations, cash flows and prospects.

We may need to defend ourselves and our employees, agents and contractors against patent, trademark and/or other intellectual property right infringement claims, which may be time-consuming and would cause us to incur substantial costs.

We are involved in and may in the future become party to additional intellectual property infringement proceedings. From time to time, we may receive communications from holders of patents, trademarks, trade secrets or other intellectual property or proprietary rights alleging that we are infringing, misappropriating, diluting or otherwise violating such rights either directly or through our employees, agents or contractors. Such parties may in the future bring suits against us alleging infringement or other violation of such rights, or otherwise assert their rights and urge us to take licenses to their intellectual property. Moreover, if the third-party technology partners (including our affiliates) with whom we jointly own or from whom we license intellectual property rights infringe, misappropriate, dilute or otherwise violate other parties’ intellectual property rights, we may also be subject to liability pursuant to any ensuing litigation.

Litigation or other legal proceedings relating to intellectual property claims, regardless of merit, may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities, even if we ultimately prevail in such proceedings. Further, if we or the third-party technology partners with whom we jointly own or from whom we license intellectual property rights are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

 

   

cease selling or leasing, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the intellectual property that we allegedly infringe, misappropriate, dilute or otherwise violate;

 

   

pay substantial royalty or license fees or other damages;

 

   

seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable or exclusive terms or at all;

 

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redesign or re-engineer our vehicles or other technology, goods or services, which may be costly, time-consuming or impossible; or

 

   

establish and maintain alternative branding for our products and services.

Although our contracts with third parties typically include indemnification clauses which require such parties to indemnify us against any damages arising from infringements of other’s intellectual property rights, in the event of a successful claim of infringement against us or our third-party technology partners, or if we fail or are unable to obtain a license to the infringed technology or other intellectual property right, our business, financial condition, results of operations, cash flows and prospects could still be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention. Our rights to indemnity may not fully cover the costs or damages arising from any intellectual property right infringements that may occur.

Risks Relating to Vietnam

There are risks associated with investments in companies with operations in Vietnam, including in relation to political, economic and legal conditions.

Currently, substantially all of our assets are located in Vietnam. As a result, future political, economic, legal and social conditions in Vietnam, as well as certain actions and policies that the government may or may not take or adopt, could materially and adversely affect our business, financial condition, results of operations and prospects. The laws and regulatory apparatus affecting the Vietnamese economy are evolving with continuing improvements and increasing transparency but are still not as well established as the laws and regulatory apparatus of regions such as Western Europe and the U.S. laws and regulations may be interpreted and enforced differently in different provinces across Vietnam. Policy changes and interpretations of applicable laws may produce unexpected consequences. In addition, corporate government and shareholders’ rights, uncertainties and limitations remain in Vietnam in relation to the interpretation and enforcement of laws. Major tax laws and regulations in Vietnam have undergone significant changes in the past decade and may continue to be amended, supplemented and clarified in the future. We cannot predict when Vietnam’s legal system will obtain the level of certainty and predictability of other jurisdictions with more developed legal systems. Any adverse changes in our tax status in Vietnam or tax laws, regulations or policies in Vietnam could adversely affect our business, financial condition, results of operations and prospects. In addition, relevant authorities may take different interpretations of tax laws than we do, leading us to incur costs or liabilities.

The performance and growth of our business in Vietnam is dependent on the health of the overall economy of Vietnam, and in particular, the automotive market and consumer demand as well as strong credit growth. Vietnam’s economy has been subject to significant fluctuations in the past, and any estimates or projections of future economic growth in Vietnam are subject to potential risks and uncertainties. The Vietnamese economy may also be adversely affected by external factors, including the monetary policy changes implemented in the U.S. and Europe. In recent months, prompted by rising benchmark U.S. dollar interest rates and a strengthening U.S. dollar, the central bank of Vietnam has raised policy rates, whilst the Vietnamese Dong has weakened against the U.S. dollar. The local economy is also seeing tightening liquidity as a result of these rate hikes and the Vietnamese government’s move to increase oversight over corporate bond issuances and refinancing, which resulted in certain criminal investigations. In addition, market volatility has increased, including softness in the real estate sector, which could adversely impact Vingroup and its subsidiaries.

Asset realization in bankruptcy proceedings may be time-consuming and expensive.

Despite the improved Vietnamese law on bankruptcy that came into effect on January 1, 2015, there is significant uncertainty on its implementation and interpretation due to lack of regulatory guidance and political sensitivities. Accordingly, the bankruptcy process in Vietnam may be complex, uncertain and time-consuming. After bankruptcy is declared, the general meeting of creditors may, subject to certain provisions of law, decide to

 

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apply either business rehabilitation or asset liquidation on the enterprise. However, in the event that any creditor or any participant in the general meeting of creditors has any objection to the resolution passed by the general meeting of creditors, it can request for a judicial review of the resolution. Upon review, the judge may convene another general meeting of the creditors if he finds reasonable grounds to do so. The decision to apply either business rehabilitation or asset liquidation on the enterprise must be confirmed by the judge before being implemented by the parties. Due to these complexities, a significant amount of time may pass before a creditor is able to recover from a Vietnamese debtor.

Vietnamese foreign exchange control may limit our ability to utilize our revenue effectively and affect our ability to receive dividends and other payments from our Vietnamese subsidiary.

Our operations are also based in Vietnam and therefore faces the risk of foreign exchange controls limiting our ability to receive dividends from our Vietnamese subsidiary. At present, foreign invested enterprises in Vietnam are, subject to conditions, generally permitted to exchange Vietnamese Dong into foreign currency at credit institutions licensed to provide foreign exchange services in Vietnam to repatriate profits and make outward remittances of foreign currency for the purchase of supplies and services, among others, provided that such foreign invested enterprise declares the intended use of the money and provides appropriate supporting documents. Such remittances are restricted to being made through registered accounts at authorized banks which are licensed to operate in Vietnam, and profits must first be converted into foreign currency prior to remittance. While under the Vietnamese government’s current foreign exchange policy, there is a low risk of foreign exchange controls restricting our ability to freely utilize our revenue and to receive dividends from our Vietnamese subsidiary, there is no assurance that the Vietnamese government will not, in future, extend its foreign exchange controls to restrict or prevent profits from being repatriated by foreign invested entities. Such a change would limit our ability to receive dividends from our Vietnamese subsidiary, through which all of our revenue is generated, and would cause a material and adverse effect on our business, financial condition and results of operations.

Investors may face difficulties enforcing foreign court judgments against us.

Substantial part of our Group’s assets is located in Vietnam. It may be difficult for investors to enforce against us judgments obtained from courts outside Vietnam with regard to any actions pertaining to our assets located in Vietnam. In addition, certain of our directors and officers are residents of Vietnam and Singapore, and the majority of the assets of such persons are located in Vietnam. As a result, it may be difficult for investors to effect service of process upon Vietnam-resident directors and officers, or to enforce against them judgments obtained in courts outside Vietnam predicated upon the laws of jurisdictions other than Vietnam. Vietnam is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and a few bilateral treaties relating to the recognition and enforcement of foreign courts’ judgments but not to any other multinational treaty in this regard. Vietnam’s Civil Procedure Code provides that a civil judgment or decision of a foreign court is enforceable in Vietnam only if there is a treaty in this regard between Vietnam and such foreign country or on a reciprocal basis or if permitted by Vietnamese laws. Vietnam’s Civil Procedure Code also sets out several grounds for Vietnamese courts to refuse the recognition and enforcement of foreign judgments, decisions or even foreign arbitral awards.

Under Vietnam’s Civil Procedure Code, a judgment of a foreign court will not be recognized and enforced in Vietnam where, among others, the competent Vietnamese court in which the recognition and enforcement is requested determines that the recognition and enforcement of such judgment in Vietnam is contrary to the “fundamental principles of the laws of Vietnam.” Such term is not clearly defined and is subject to the discretion of the relevant Vietnamese court.

 

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Risks Relating to Being a Public Company

We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”

We expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and national exchanges, impose various requirements on the corporate governance practices of public companies. As a company with less than $1.235 billion in net revenues for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. As an emerging growth company, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include an exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time consuming and costly. After we are no longer an “emerging growth company,” we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the U.S. that are applicable to U.S. domestic issuers, including:

 

   

the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;

 

   

the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

 

   

the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

 

   

the selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of Nasdaq. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely than that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.

We may be or become, or otherwise be treated as, a PFIC, which could result in adverse U.S. federal income tax consequences to U.S. Holders.

In general, a non-U.S. corporation is a PFIC for U.S. federal income tax purposes for any taxable year in which (i) 50% or more of the average value of its assets (generally determined on the basis of a weighted quarterly average) consists of assets that produce, or are held for the production of, passive income, or (ii) 75% or more of its gross income consists of passive income. Passive income generally includes dividends, interest, royalties, rents, investment gains, net gains from the sales of property that does not give rise to any income and

 

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net gains from the sale of commodities (subject to certain exceptions, such as an exception for certain income derived in the active conduct of a trade or business). Cash and cash equivalents are passive assets. The value of goodwill will generally be treated as an active or passive asset based on the nature of the income produced in the activity to which the goodwill is attributable. For purposes of the PFIC rules, a non-U.S. corporation that owns, directly or indirectly, at least 25% by value of the stock of another corporation is treated as if it held its proportionate share of the assets of the other corporation, and received directly its proportionate share of the income of the other corporation.

Based on our current and expected income and assets (taking into account the expected cash proceeds from issuances of our ordinary shares pursuant to the Yorkville Subscription Agreement, and our current and anticipated market capitalization), we do not presently expect to be a PFIC for our current taxable year. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a fact-intensive inquiry made on an annual basis after the close of each taxable year and that depends, in part, upon the composition of our income and assets. In addition, the application of the PFIC rules to companies with our composition of income and assets is subject to significant uncertainty. Fluctuations in the market price of our ordinary shares may cause us to become a PFIC for our current or subsequent taxable years because the value of our assets for the purpose of the first part of the test described above may be determined by reference to the market price of our ordinary shares. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and any cash raised from issuances of our ordinary shares pursuant to the Yorkville Subscription Agreement.

If we are, or is treated as, a PFIC for any taxable year during a U.S. Holder’s holding period for our securities, the U.S. Holder generally will be subject to adverse U.S. federal income tax consequences, including increased tax liability on disposition gains and certain “excess distributions” and additional reporting requirements. As discussed below, we do not intend to prepare or provide the information necessary for a U.S. Holder to make a qualified electing fund election with respect to our ordinary shares in the event that we are (or are treated as) a PFIC in any future taxable year.

U.S. Holders should consult their tax advisers regarding the application of the PFIC rules to us and the risks of owning equity securities in a company that may be, or may be treated as, a PFIC. See section titled “Material Tax Considerations—Material U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules.”

If a U.S. Holder is treated as owning at least 10% of our ordinary shares, such U.S. Holder may be subject to adverse U.S. federal income tax consequences.

For U.S. federal income tax purposes, if a U.S. Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “United States shareholder” with respect to our company, or any of our subsidiaries, if we or such subsidiary is a “controlled foreign corporation.” If we have one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as a controlled foreign corporation regardless of whether we are treated as a controlled foreign corporation (although there are recently promulgated final and currently proposed Treasury regulations that may limit the application of these rules in certain circumstances).

Certain United States shareholders of a controlled foreign corporation may be required to report annually and include in their U.S. federal taxable income their pro rata share of the controlled foreign corporation’s “Subpart F income” and, in computing their “global intangible low-taxed income,” “tested income” and a pro rata share of the amount of certain U.S. property (including certain stock in U.S. corporations and certain tangible assets located in the United States) held by the controlled foreign corporation regardless of whether such controlled foreign corporation makes any distributions. The amount includable by a United States shareholder under these rules is based on a number of factors, including potentially, but not limited to, the controlled foreign corporation’s current earnings and profits (if any), tax basis in the controlled foreign corporation’s assets, and

 

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foreign taxes paid by the controlled foreign corporation on its underlying income. Failure to comply with these reporting obligations (or related tax payment obligations) may subject such United States shareholder to significant monetary penalties and may extend the statute of limitations with respect to such United States shareholder’s U.S. federal income tax return for the year for which reporting (or payment of tax) was due. We cannot provide any assurances that we will assist U.S. Holders in determining whether we or any of our subsidiaries are treated as a controlled foreign corporation for U.S. federal income tax purposes or whether any U.S. Holder is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations if we, or any of our subsidiaries, is treated as a controlled foreign corporation for U.S. federal income tax purposes.

Risks Relating to Ownership of Our Securities

A market for our securities may not be sustained, which would adversely affect the liquidity and price of our securities.

The price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities may not be sustained. Excluding 43,771,153 Released Shares outstanding, the Company Initial Shareholders hold an aggregate of 96.6% of our ordinary shares outstanding as of October 19, 2023. As a result, the liquidity of our securities may be significantly limited. In addition, the price of our securities can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities become delisted from Nasdaq and are quoted on the OTC Bulletin Board (an inter-dealer automated quotation system for equity securities that is not a national securities exchange), the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq. You may be unable to sell your securities unless a market can be established or sustained.

The trading price of our ordinary shares and warrants may be volatile, and future sales of the securities and the availability of a large number of such securities could depress the price of the securities, which could result in substantial losses to investors.

The stock markets, including Nasdaq on which our ordinary shares and warrants are listed, have from time to time experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market is sustained for our ordinary shares and warrants, the market price of our ordinary shares and warrants may be volatile and could decline significantly. In addition, the trading volumes in our ordinary shares and warrants may fluctuate and cause significant price variations to occur. If the market prices of our ordinary shares and warrants decline significantly, you may be unable to resell the ordinary shares or warrants at or above the market price of such securities as of the date that they were acquired.

The trading price of our ordinary shares and warrants may be volatile and could fluctuate widely due to factors beyond our control, including:

 

   

variations in our revenues, earnings and cash flow;

 

   

actual or anticipated differences in our estimates, or in the estimates of analysts, for our revenues, results of operations, level of indebtedness, liquidity or financial condition;

 

   

announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;

 

   

announcements of new services and expansions by us or our competitors;

 

   

changes in financial estimates by securities analysts;

 

   

adverse publicity about our company, our services or our industry;

 

   

additions or departures of key personnel;

 

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release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;

 

   

new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to our company;

 

   

sale of our ordinary shares or other securities in the future;

 

   

market conditions in our industry;

 

   

potential litigation or regulatory investigations; and

 

   

the realization of any of the risk factors presented in this prospectus.

Any of these factors may result in large and sudden changes in the volume and price at which our ordinary shares and warrants trade.

The sale of a significant number of the ordinary shares or other equity securities in the public market, or the perception that such sales may occur, could materially and adversely affect the market price of the ordinary shares. These factors could also materially impair our ability to raise capital through equity offerings in the future.

Furthermore, employees, consultants and directors of our company and our subsidiaries are expected to be granted equity awards under the VinFast Award Plan (as defined below). You will experience additional dilution when those equity awards and purchase rights become vested and settled or exercised, as applicable, for our ordinary shares. Sales of ordinary shares by holders after the vesting of awards or holders of options who have exercised their options under any incentive plan that we may in the future implement could also cause the price of the ordinary shares to fall.

In the past, shareholders of public companies have brought securities class action suits against those companies following periods of instability in the market price of their securities. If we are involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.

Sales of a substantial number of our securities in the public market by our existing shareholders could potentially cause the price of our ordinary shares to fall.

The 100,800,000 ordinary shares being offered by Yorkville pursuant to this registration statement, together with the 72,084,942 ordinary shares offered pursuant to the First Resale Registration Statement by the selling securityholders named therein (which includes an aggregate of 46,293,461 Released Shares offered by the Company Selling Securityholders), represent 7.4% of our outstanding ordinary shares as of October 19, 2023.

The number of ordinary shares that are being registered for resale by Yorkville, together with the number of ordinary shares that have been registered for resale pursuant to the First Resale Registration Statement, will constitute more than thirteen times the number of ordinary shares held by persons other than the selling securityholders named in the First Resale Registration Statement and our affiliates. Accordingly, the ordinary shares being registered for resale on the registration statement which this prospectus forms a part, together with the number of shares that have been registered for resale pursuant to the First Resale Registration Statement, are anticipated to be significant, relative to our current public float. While the sale from time to time of ordinary shares by Yorkville and by certain of our other shareholders pursuant to the First Resale Registration Statement

 

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will increase our public float, we are unable to predict the effect that such sales may have on the prevailing market price of our ordinary shares and warrants. Sales of ordinary shares in the public market by Yorkville or by certain of our other shareholders pursuant to the First Resale Registration Statement, or the perception that those sales might occur, could potentially have a negative impact on the market price of ordinary shares and warrants. The sale of all the securities being offered in this prospectus could result potentially in a decline in the public trading price of our securities.

If securities or industry analysts do not publish or cease publishing research or reports about our company, our business, or our market, or if they change their recommendations regarding our ordinary shares adversely, then the price and trading volume of our ordinary shares could decline.

The trading market for our ordinary shares will be influenced by the research and reports that industry or financial analysts publish about our business. We do not control these analysts, or the content and opinions included in their reports. As a new public company, we may be slow to attract research coverage and the analysts who publish information about our ordinary shares will have had relatively little experience with us, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates. In the event we obtain industry or financial analyst coverage, if any of the analysts who cover our issues an inaccurate or unfavorable opinion regarding us, our share price would likely decline. In addition, the share prices of many companies in the technology industry have declined significantly after those companies have failed to meet, or significantly exceed, the financial guidance publicly announced by the companies or the expectations of analysts. If our financial results fail to meet, or significantly exceed, our announced guidance or the expectations of analysts or public investors, analysts could downgrade our ordinary shares or publish unfavorable research about it. If one or more of these analysts cease coverage of our company or fail to publish reports on our company regularly, our visibility in the financial markets could decrease, which in turn could cause our share price or trading volume to decline.

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities.

If we fail to satisfy the continued listing requirements of Nasdaq such as the corporate governance requirements or the minimum closing bid price requirement, it may take steps to delist our securities. Such a delisting would likely have a negative effect on the price of the securities and would impair your ability to sell or purchase the securities when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the relevant minimum bid price requirement or prevent future non-compliance with the relevant listing requirements. Additionally, if our securities become delisted from Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if it were quoted or listed on Nasdaq. You may be unable to sell your securities unless a market can be established or sustained.

We will qualify as an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are eligible to be treated as an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. We intend to take advantage of this extended transition period under the JOBS Act for adopting new or revised financial accounting standards.

For as long as we continue to be an emerging growth company, we may also take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not

 

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emerging growth companies, including presenting only limited selected financial data and not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. As a result, our shareholders may not have access to certain information that they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if our total annual gross revenue exceeds $1.235 billion, if we issues more than $1.0 billion in non-convertible debt securities during any three-year period, or if before that time we are a “large accelerated filer” under U.S. securities laws.

We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and our share price may be more volatile. Further, there is no guarantee that the exemptions available to us under the JOBS Act will result in significant savings. To the extent that we choose not to use exemptions from various reporting requirements under the JOBS Act, we will incur additional compliance costs, which may impact our financial condition.

We are a foreign private issuer and, as a result, we are not be subject to U.S. proxy rules and are subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, although we are subject to Singapore laws and regulations with regard to certain of these matters and intend to furnish comparable quarterly information on Form 6-K. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information. As a result of all of the above, you may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.

As we are a “foreign private issuer” and intend to follow certain home country corporate governance practices, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all corporate governance requirements from Nasdaq.

As a foreign private issuer, we have the option to follow certain home country corporate governance practices rather than those of Nasdaq, provided that we disclose the requirements we are not following and describes the home country practices we are following. We intend to rely on this “foreign private issuer exemption” with respect to the rules of Nasdaq for shareholder meeting quorums and rules requiring shareholder approval. We may in the future elect to follow home country practices with regard to other matters. As a result, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all corporate governance requirements of Nasdaq.

Risks Relating to Investments in Singapore Companies

Singapore take-over laws contain provisions which may vary from those in other jurisdictions.

The Singapore Take-Over Code contains certain provisions that may possibly delay, deter or prevent a future take-over or change in control of us. Under the Singapore Take-Over Code, except with the consent of the

 

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Securities Industry Council of Singapore (“SIC”), any person acquiring an interest, whether by a series of transactions over a period of time or not, either on his own or together with parties acting in concert with him, shares which carry 30% or more of our voting rights, is required to extend a take-over offer for all the relevant class(es) of shares in our capital which carry votes in accordance with the Singapore Take-Over Code. Except with the consent of the SIC, such a take-over offer is also required to be made if a person (together with persons acting in concert with him) holding between 30% and 50% (both inclusive) of our voting rights, either on his own or together with parties acting in concert with him, acquires additional voting shares representing more than 1% of our voting rights in any six-month period. In the case where our company has more than one class of equity share capital, a comparable take-over offer must be made for each class of shares in accordance with the Singapore Take-Over Code and the SIC should be consulted in advance in such cases. While the Singapore Take-Over Code seeks to ensure an equality of treatment among shareholders in take-over or merger situations, its provisions could substantially impede the ability of the shareholders to benefit from a change of control and, as a result, may adversely affect the market price of the ordinary shares and the ability to realize any benefit from a potential change of control. In addition, an offeror must treat all shareholders of the same class in an offeree company equally. This concentration of ownership could accelerate, delay, defer or prevent a change in control of us or a successful offer under the Singapore Take-Over Code by another person.

On August 2, 2023, the SIC waived application of the provisions of the Singapore Take-Over Code for our company, subject to certain exceptions. Pursuant to the waiver, we are exempted from application of the provisions of the Singapore Take-over Code, except in the case of a “tender offer” (within the meaning of U.S. securities laws) where the Tier 1 exemption set forth in Rule 14d-1(c) of the Exchange Act, is available and the offeror relies on such exemption to avoid full compliance with applicable rules and regulations regarding tender offers in the U.S. In connection with the application for the waiver, our board of directors had submitted to the SIC a written confirmation to the effect that the application of the U.S. regulatory regime (without concurrent regulation by the Singapore Take-Over Code) would be appropriate and that it is the unanimous view of our board of directors that obtaining the waiver is in the interest of our company. If the exceptions to the waiver are applied, we may nonetheless be subject to the Singapore Take-Over Code and the ability of our shareholders to benefit from a change of control could be substantially hindered.

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this proxy statement/prospectus, including statements regarding our company or our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions. Forward-looking statements include, without limitation, our expectations concerning the outlook for our business, productivity, plans and goals for future operational improvements and capital investments, operational performance, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, as well as any information concerning possible or assumed future results of operations of our company as set forth in the sections of this prospectus.

Our audited financial statements as of and for the years ended December 31, 2021 and 2022 and the unaudited interim condensed consolidated financial statements as of June 30, 2023 and for the six months ended June 30, 2022 and 2023 included in this prospectus relate only to the historical financial information of our company. It does not extend to the forward-looking information and should not be read as if it does.

Forward-looking statements involve a number of risks, uncertainties and assumptions, and actual results or events may differ materially from those projected or implied in those statements. Important factors that could cause such differences include, among others, the following:

 

   

We are a growth stage company with a history of losses, negative cash flows from operating activities and negative working capital;

 

   

We expect to require significant additional capital, which we expect to fund through additional debt and equity financing, to support our business growth, and such capital may not be available on commercially reasonable terms or at all, which may impose restrictions on capital raising activities and or other financial or operational matters or lead to dilution of your shareholding in our company;

 

   

We are a new entrant in the EV industry and faces risks in the marketing and sale of our EVs in international markets where we only recently began delivering;

 

   

Our ability to successfully introduce and market net products and services;

 

   

Our ability to grow and market our brand and EVs in markets outside Vietnam and manage any negative publicity which may harm our brand, reputation, public credibility and consumer confidence, including any negative publicity arising from any differences in the advertised driving range, certified driving range and actual driving performance of our EVs, which depend on various factors beyond our control, including driving habits and conditions;

 

   

Our ability to successfully compete in the highly competitive automotive industry;

 

   

Our ability to control the costs associated with our operations;

 

   

We depend, directly and indirectly, on suppliers for component parts and raw materials and any failure on the part of the suppliers to deliver such supplies according to our schedule and at prices, quality and volumes acceptable to us, could materially and adversely affect our business, results of operations and financial condition;

 

   

Our ability to maintain our relationship with existing critical suppliers and to create relationships with new suppliers;

 

   

Our establishment of manufacturing facilities outside of Vietnam and our expansion of our production capacity within Vietnam may be subject to delays or cost overruns, may not produce expected benefits or may cause us to not meet our projections for future production capacity;

 

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Reservations for our vehicles may not result in completed sales and our actual vehicle sales and revenue could differ materially from the number of reservations received;

 

   

Demand for, and consumers’ willingness to adopt EVs, which may be affected by various factors, including developments in EV or alternative fuel technology;

 

   

Inadequate access to EV charging stations or related infrastructure;

 

   

The unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for EV manufacturers and buyers;

 

   

Any failure to maintain an effective system of internal control over financial reporting in the future and any failure to accurately and timely report our financial condition, results of operations or cash flows could adversely affect investor confidence;

 

   

We have identified material weaknesses in our internal control over financial reporting and any ineffective remediation of such material weaknesses, any additional material weaknesses in the future or failure to develop and maintain effective internal control over financial reporting could impair our ability to produce timely and accurate financial statements and comply with applicable laws and regulations;

 

   

Our corporations actions that require shareholder approval will be substantially controlled by our controlling shareholders, which may prevent you and other shareholders from influencing significant decisions and reduce the value of your investment;

 

   

We rely on Vingroup for financial support and Vingroup affiliates for key aspects of our business, and any potential conflicts of interests with or any events impacting the reputations of its affiliates or unfavorable market conditions or adverse business operation of Vingroup and Vingroup affiliates could have a material adverse effect on our business and results of operations; and

 

   

the other matters described in the section titled “Risk Factors.”

You are cautioned against placing undue reliance on forward-looking statements, which reflect current beliefs and are based on information currently available as of the date a forward-looking statement is made. Forward-looking statements set forth herein speak only as of the date of this prospectus. We do not undertake any obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that we will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear in our public filings with the SEC, which are or will be (as appropriate) accessible at www.sec.gov, and which you are advised to consult. For additional information, please see the section titled “Where You Can Find Additional Information.”

 

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COMMITTED EQUITY FINANCING

On October 20, 2023, we entered into the Yorkville Subscription Agreement. Pursuant to the Yorkville Subscription Agreement, we have the right to issue to Yorkville, and Yorkville has the obligation to subscribe for, ordinary shares for an aggregate subscription amount of up to $1.0 billion, subject to certain limitations and conditions set forth in the Yorkville Subscription Agreement, from time to time during the term of the Yorkville Subscription Agreement. Issuances of ordinary shares to Yorkville under the Yorkville Subscription Agreement, and the timing of any such issuances, are at our option, and we are under no obligation to issue any ordinary shares to Yorkville under the Yorkville Subscription Agreement.

In accordance with our obligations under the Yorkville Subscription Agreement, we have filed the registration statement of which this prospectus forms a part with the SEC to register under the Securities Act the resale by Yorkville of 100,800,000 ordinary shares consisting of (i) 800,000 Commitment Shares and (ii) up to 100,000,000 ordinary shares that we may elect, in our sole discretion, to issue to Yorkville, from time to time under the Yorkville Subscription Agreement. We do not have the right to require Yorkville to subscribe for any ordinary shares under the Yorkville Subscription Agreement until the date on which all of the conditions to Yorkville’s subscription obligation set forth in the Yorkville Subscription Agreement have been satisfied, including that the registration statement of which this prospectus forms a part be declared effective by the SEC and the final form of this prospectus is filed with the SEC. From and after such date, we will have the right, but not the obligation, from time to time at our discretion during the Commitment Period, to require Yorkville to subscribe for a specified amount of ordinary shares by delivering an Advance Notice to Yorkville.

Each ordinary share that may be offered pursuant to this prospectus will be subscribed for by Yorkville from time to time pursuant to the Yorkville Subscription Agreement at 97.5% of the Market Price, being the lowest of the daily VWAP during the Pricing Period, other than the daily VWAP on any day excluded pursuant to the terms of the Yorkville Subscription Agreement. With respect to each Advance, if VinFast notifies Yorkville of a minimum acceptable price with respect to such Advance, then if the VWAP of the ordinary shares is below the minimum acceptable price indicated by VinFast or if there is no VWAP, there will be an automatic reduction to the amount of the Advance by one third, and that day will be excluded from the Pricing Period. The total number of ordinary shares to be issued to Yorkville in respect of each Advance with any excluded days will be increased by such number of ordinary shares equal to the greater of the number of ordinary shares, if any, sold by Yorkville on such excluded days or such number of ordinary shares that Yorkville elects to subscribe for, in each case, at a subscription price per ordinary share equal to 97.5% of the minimum acceptable price, subject to the limitations set forth in the Yorkville Subscription Agreement. The ordinary shares will be issued to Yorkville promptly following our receipt of a wire transfer from Yorkville to us for the relevant subscription amount (and in any event, no later than one trading day after such receipt).

We will control the timing and amount of any issuances of ordinary shares to Yorkville. Actual issuances of ordinary shares to Yorkville under the Yorkville Subscription Agreement will depend on a variety of factors to be determined by us from time to time, including the frequency and prices at which we issue ordinary shares to Yorkville, market conditions and the trading price of our ordinary shares, our ability to meet the conditions set forth in the Yorkville Subscription Agreement, and determinations by us as to the appropriate sources of funding for our company and our operations.

Under applicable rules of Nasdaq and the Yorkville Subscription Agreement, in no event may we issue to Yorkville ordinary shares that would result in the number of our ordinary shares issued under the Yorkville Subscription Agreement exceeding 466,212,650 ordinary shares, being 19.99% of our ordinary shares issued as of October 19, 2023, unless (a) we obtain shareholder approval to issue ordinary shares in excess of the Exchange Cap or (b) the average price of all applicable issuances of ordinary shares hereunder (including the 800,000 Commitment Shares of our ordinary shares issued for these purposes) equals or exceeds $5.69 (being the reference price under Nasdaq Rules) per share (which represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the Yorkville Subscription Agreement;

 

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or (ii) the average Nasdaq Official Closing Price of our ordinary shares (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the Yorkville Subscription Agreement). In any event, we may not issue any ordinary shares under the Yorkville Subscription Agreement if such issuance would breach any applicable Nasdaq listing rules.

The Yorkville Subscription Agreement does not obligate Yorkville to subscribe for or acquire any ordinary shares under the Yorkville Subscription Agreement if those ordinary shares, when aggregated with all other ordinary shares acquired by Yorkville under the Yorkville Subscription Agreement, would result in Yorkville beneficially owning more than 4.99% of the then outstanding ordinary shares.

The net proceeds under the Yorkville Subscription Agreement to us will depend on the frequency and prices at which we issue ordinary shares to Yorkville. We expect that any proceeds received by us from such issuances to Yorkville will be used for working capital and general corporate purposes. See “Use of Proceeds.”

In connection with the entry into the Yorkville Subscription Agreement, we paid YA Global II SPV, LLC, a subsidiary of Yorkville, a structuring fee in the amount of $25,000. In addition, as consideration for Yorkville’s subscription commitment, we will issue 800,000 Commitment Shares to Yorkville within two trading days from the date of this prospectus (but no later than April 17, 2024, which date shall be automatically extended by the number of days that the SEC may not be operating at full capacity due to the shutdown of the U.S. federal government).

Conditions to Delivery of Advance Notices

Our ability to deliver Advance Notices to Yorkville under the Yorkville Subscription Agreement is subject to the satisfaction or waiver of certain conditions, including, among other things, the following:

 

   

the accuracy in all material respects of our representations and warranties included in the Yorkville Subscription Agreement;

 

   

the effectiveness of this registration statement that includes this prospectus (and any one or more additional registration statements filed with the SEC that include ordinary shares that may be issued by us to Yorkville under the Yorkville Subscription Agreement);

 

   

VinFast having filed with the SEC in a timely manner all reports, notices and other documents required under the Exchange Act and applicable SEC regulations (i) since August 14, 2023 or (ii) after August 14, 2024, during the twelve-month period immediately preceding the date of an Advance Notice;

 

   

no Material Outside Event (as defined in the Yorkville Subscription Agreement) shall have occurred or be continuing;

 

   

VinFast having performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Yorkville Subscription Agreement to be performed, satisfied or complied with by VinFast;

 

   

the absence of any statute, regulation, executive order, decree, ruling or injunction by any court or governmental authority of competent jurisdiction which prohibits or directly, materially and adversely affects any of the transactions contemplated by the Yorkville Subscription Agreement;

 

   

trading in our ordinary shares shall not have been suspended by the SEC, Nasdaq or FINRA;

 

   

VinFast shall not have received any final and non-appealable notice that the listing or quotation of the ordinary shares on Nasdaq shall be terminated;

 

   

the representations contained in the appliable Advance Notice shall be true and correct in all material respects; and

 

   

VinFast having issued all ordinary shares relating to all prior Advances.

 

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No Short-Selling by Yorkville

Yorkville has agreed that, during the term of the Yorkville Subscription Agreement, neither Yorkville nor any of its directors, officers, employees and related persons, or any entity managed or controlled by Yorkville, shall, directly or indirectly, engage in any short sales of our ordinary shares, provided that such persons may sell ordinary shares that Yorkville is unconditionally obligated to subscribe for pursuant to the Yorkville Subscription Agreement.

Termination of the Yorkville Subscription Agreement

Unless earlier terminated as provided in the Yorkville Subscription Agreement, the Yorkville Subscription Agreement will terminate automatically on the earliest to occur of:

 

   

the first day of the month next following the 36-month anniversary of the date of the Yorkville Subscription Agreement; or

 

   

the date on which Yorkville shall have made payment of Advances pursuant to the Yorkville Subscription Agreement for ordinary shares equal to the Commitment Amount.

We have the right to unilaterally terminate the Yorkville Subscription Agreement upon three trading days’ prior written notice to Yorkville, provided that (i) there are no outstanding Advance Notices that have not been completed; and (ii) we have paid all amounts owed to Yorkville pursuant to the Yorkville Subscription Agreement, including the Commitment Shares.

VinFast and Yorkville may also terminate the Yorkville Subscription Agreement at any time by mutual written consent.

Effect of Issuances of Ordinary Shares under the Yorkville Subscription Agreement on our Shareholders

All ordinary shares that may be issued by us to Yorkville under the Yorkville Subscription Agreement that are being registered under the Securities Act for resale by Yorkville under this prospectus are expected to be freely tradable. The ordinary shares being registered for resale in this offering may be issued by us to Yorkville from time to time at our discretion during the Commitment Period. The resale by Yorkville of a significant amount of shares registered for resale in this offering at any given time, or the perception that these sales may occur, could cause the market price of our ordinary shares to decline. Issuances of our ordinary shares, if any, to Yorkville under the Yorkville Subscription Agreement will depend upon market conditions and other factors. VinFast may ultimately decide to issue to Yorkville all, some or none of the ordinary shares that may be available for issuance to Yorkville pursuant to the Yorkville Subscription Agreement.

If and when we do elect to issue ordinary shares to Yorkville pursuant to the Yorkville Subscription Agreement, Yorkville may resell all, some, or none of such ordinary shares in its discretion and at different prices subject to the terms of the Yorkville Subscription Agreement. As a result, investors who purchase ordinary shares from Yorkville in this offering at different times will likely pay different prices for those ordinary shares, and so may experience different levels of dilution and, in some cases, substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the ordinary shares they purchase from Yorkville in this offering as a result of future issuances made by us to Yorkville at prices lower than the prices such investors paid for their ordinary shares in this offering.

Because the subscription price per ordinary share to be paid by Yorkville for the ordinary shares that we may elect to issue to Yorkville under the Yorkville Subscription Agreement, if any, will fluctuate based on the market prices of our ordinary shares during the applicable pricing period, as of the date of this prospectus we cannot reliably predict the number of ordinary shares that we will issue to Yorkville under the Yorkville Subscription Agreement, the actual subscription price per ordinary share to be paid by Yorkville for those ordinary shares, or the actual gross proceeds to be raised by us from those issuances, if any.

 

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Although the Yorkville Subscription Agreement provides that we may, in our discretion, from time to time after the date of this prospectus and during the term of the Yorkville Subscription Agreement, direct Yorkville to subscribe for our ordinary shares in one or more Advances under the Yorkville Subscription Agreement, for a maximum aggregate subscription price of up to $1.0 billion, only 100,000,000 ordinary shares (excluding 800,000 Commitment Shares) are being registered for resale under the registration statement of which this prospectus forms a part. While the market price of our ordinary shares may fluctuate from time to time after the date of this prospectus and, as a result, the actual subscription price to be paid by Yorkville under the Yorkville Subscription Agreement for ordinary shares, if any, may also fluctuate, in order for us to receive the full amount of Yorkville’s commitment under the Yorkville Subscription Agreement, it is possible that we may need to issue more than the number of ordinary shares being registered for resale under the registration statement of which this prospectus forms a part.

If it becomes necessary for us to issue to Yorkville more ordinary shares than are being registered for resale under this prospectus in order to receive aggregate gross proceeds equal to $1.0 billion under the Yorkville Subscription Agreement, we must first (i) to the extent necessary, obtain shareholder approval prior to issuing ordinary shares of the Exchange Cap in accordance with applicable Nasdaq rules, and (ii) file with the SEC one or more additional registration statements to register under the Securities Act the resale by Yorkville of any such additional ordinary shares, which the SEC must declare effective, in each case, before we may elect to issue any additional ordinary shares to Yorkville under the Yorkville Subscription Agreement. The number of ordinary shares ultimately offered for resale by Yorkville depends upon the number of ordinary shares, if any, we ultimately issue to Yorkville under the Yorkville Subscription Agreement.

The issuance, if any, of ordinary shares to Yorkville pursuant to the Yorkville Subscription Agreement would not affect the rights or privileges of our existing shareholders, except that the economic and voting interests of each of our existing shareholders would be diluted. Although the number of ordinary shares that our existing shareholders own would not decrease as a result of issuances, if any, under the Yorkville Subscription Agreement, the ordinary shares owned by our existing shareholders would represent a smaller percentage of our total issued ordinary shares after any such issuance.

The following table sets forth the amount of gross proceeds, before deducting any discount to Yorkville or expenses payable by us, we would receive from Yorkville from our issuance of such number of ordinary shares to Yorkville for a maximum aggregate subscription amount of $1.0 billion to Yorkville under the Yorkville Subscription Agreement at varying subscription prices:

 

Assumed Average Subscription Price Per Ordinary Share

   Number of
Ordinary
Shares to be
Issued if Full
Subscription(1)
     Percentage of
Outstanding
Shares After
Giving Effect
to the Issuance
to Yorkville(2)
    Gross Proceeds
from the Issuance
of Ordinary Shares
to Yorkville Under
the Yorkville
Subscription
Agreement
 

$5.00

     200,000,000        7.9   $ 1,000,000,000  

$5.38(3)

     185,873,605        7.4   $ 999,999,994.90  

$5.69(4)

     175,746,924        7.0   $ 999,999,997.56  

$6.00

     166,666,666        6.7   $ 999,999,997  

$7.00

     142,857,142        5.8   $ 999,999,994  

$8.00

     125,000,000        5.1   $ 1,000,000,000  

$9.00

     111,111,111        4.6   $ 999,999,999  

$10.00

     100,000,000        4.1   $ 1,000,000,000  

$20.00

     50,000,000        2.1   $ 1,000,000,000  

$50.00

     20,000,000        0.9   $ 1,000,000,000  

 

(1)

Does not include 800,000 Commitment Shares to be issued to Yorkville as consideration for its commitment to subscribe for ordinary shares under the Yorkville Subscription Agreement. The number of ordinary shares offered by this prospectus may not cover all the shares we ultimately issue to Yorkville under the Yorkville Subscription Agreement, depending on the subscription price per share. We

 

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  have included in this column such number of ordinary shares that may be issued to Yorkville (excluding the 800,000 Commitment Shares), without regard to the Beneficial Ownership Cap. The assumed average subscription prices are solely for illustration and are not intended to be estimates or predictions of future share performance.
(2)

The denominator is based on 2,332,229,366 ordinary shares outstanding as of October 19, 2023 (for the avoidance of doubt, excluding the 800,000 Commitment Shares to be issued to Yorkville pursuant to the Yorkville Subscription Agreement), adjusted to include the issuance of the number of shares set forth in the second column that we would have issued to Yorkville, assuming the average subscription price in the first column. The numerator is based on the number of ordinary shares set forth in the second column.

(3)

Represents the closing price of our ordinary shares on Nasdaq on October 20, 2023.

(4)

Represents the closing price of our ordinary shares on Nasdaq on October 19, 2023, the trading day prior to execution of the Yorkville Subscription Agreement.

 

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USE OF PROCEEDS

All of the ordinary shares offered by Yorkville pursuant to this prospectus will be sold by Yorkville for its own account. We will not receive any of the direct proceeds from these sales. However, we expect to receive proceeds from issuances of ordinary shares that we may elect to make to Yorkville pursuant to the Yorkville Subscription Agreement, if any, from time to time in our discretion. As of the date of this prospectus, we are unable to estimate the actual amount of proceeds that we may receive under the Yorkville Subscription Agreement, as it will depend on a number of factors, including the frequency and prices at which we issue ordinary shares to Yorkville, market conditions and the trading price of our ordinary shares, our ability to meet the conditions set forth in the Yorkville Subscription Agreement, and determinations by us as to the appropriate sources of funding for our company and our operations. See “Committed Equity Financing” for a description of how the price at which we may issue ordinary shares to Yorkville is calculated pursuant to the Yorkville Subscription Agreement.

We plan to use the net proceeds from issuances of ordinary shares, if any, under the Yorkville Subscription Agreement for working capital and general corporate purposes.

Our expected use of net proceeds under the Yorkville Subscription Agreement represents our current intentions based on our present plans and business condition, which could change in the future as our plans and business conditions evolve. As of the date of this prospectus, we cannot predict with certainty any or all of the particular uses for the net proceeds to be received under the Yorkville Subscription Agreement, or the amounts, if any, that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds may vary depending on numerous factors, including our ability to obtain additional financing and changes we may make to our development plan. As a result, our management will have broad discretion in the application of the net proceeds, which may include uses not set forth above, and investors will be relying on our judgment regarding the application of the net proceeds from this offering.

Yorkville will pay any brokerage fees or commissions and expenses incurred by it for brokerage, accounting, tax or legal services or any other expenses incurred in selling the securities. We will bear the costs, fees and expenses incurred in effecting the registration of the securities covered by this prospectus, including all registration and filing fees, Nasdaq listing fees and fees and expenses of our counsel and our independent registered public accounting firm.

 

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DIVIDEND POLICY

We have never declared or paid any cash dividends. We currently have not adopted a dividend policy with respect to future dividends and we do not have any present plan to pay any dividends on our ordinary shares in the foreseeable future after this offering. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions (including in the agreements governing our credit facilities or other debt instruments), capital requirements, business prospects and other factors our board of directors may deem relevant.

While we do not have any present plan to pay any dividends on our ordinary shares in the foreseeable future after this offering, we may, in the future, by ordinary resolution, declare dividends at a general meeting of our shareholders, but no dividend shall be payable except out of our profits available for distribution, as derived from the standalone audited financial statements of our company and not from our audited consolidated financial statements. The amount of any such dividend shall not exceed the amount recommended by our board of directors. Subject to our constitution and in accordance with the Singapore Companies Act, our board of directors may, without the approval of our shareholders, declare and pay interim dividends but any final dividends we declare must be approved by an ordinary resolution at a general meeting of our shareholders. VinFast Auto Ltd. is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries. Regulations in certain markets where we utilize dividend payments may restrict the ability of our subsidiaries to pay dividends to us.

 

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CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2023:

 

     As of September 30, 2023  
     Actual  
    

VND

(in billions)

   

USD(1)

(in millions)

 

Cash and cash equivalents

     3,154.7       131.0  

Deficit:

    

Ordinary shares – VinFast Auto Ltd. (2,332,229,366 shares issued and outstanding as of September 30, 2023)

     7,621.6       316.4  

Accumulated losses

     (168,785.6     (7,006.8

Additional paid-in capital

     19,356.6       803.5  

Other comprehensive loss

     (101.4     (4.2
  

 

 

   

 

 

 

Deficit attributable to equity holders of the parent

     (141,908.8     (5,891.0
  

 

 

   

 

 

 

Non-controlling interests(2)

     77,376.7       3,212.1  

Total deficit (A)

     (64,532.1     (2,678.9

Long-term debt:

    

Long-term interest-bearing loans and borrowings

     45,678.5       1,896.2  

Long-term financial liability

     17,245.4       715.9  
  

 

 

   

 

 

 

Total-long term debt (B)

     62,923.9       2,612.1  

Long-term amount due to related parties:

    

Long-term amounts due to related parties

     18,782.1       779.7  

Total capitalization (A) + (B)(2)

     (1,608.2     (66.8
  

 

 

   

 

 

 

 

Notes:

(1)

All translations from Vietnam Dong to U.S. dollars in this table were made at the rate of VND24,089 to $1.00, representing the central exchange rate quoted by the State Bank of Vietnam Operations Centre as of September 30, 2023. The Company makes no representation that the Vietnam Dong or U.S. dollars amounts referred could be converted into U.S. dollars or Vietnam Dong, as the case may be, at any particular rate or at all.

(2)

Non-controlling interests reflect certain dividend preference shares issued by VinFast Vietnam to Vingroup (i) in March 2022 in return for an advance capital contribution of VND6.0 trillion ($249.1 million) (“DPS1”), (ii) in December 2022 in exchange for VND45,733.7 billion ($1,898.5 million) in borrowings from VinFast Vietnam to Vingroup (“DPS4”) and (iii) as part of our Reorganization in December 2022, in return for the assignment of the Share Acquisition P-Note previously held by Vingroup amounting to VND25.8 trillion ($1,070.3 million) (“DPS3”). For details on the terms of DPS1, DPS3 and DPS4, see “Related Party Transactions—Transactions with Vingroup Affiliates—Capital Contributions to VinFast Vietnam.”

(3)

Calculated as total deficit plus long-term interest-bearing loans, borrowings and long-term financial liability.

 

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ENFORCEABILITY OF CIVIL LIABILITIES

Singapore

We are incorporated under the laws of the Republic of Singapore, and certain of our officers and directors are residents outside the U.S. In addition, a significant portion of our operations and business is conducted, and a substantial portion of our assets are located, outside the U.S.

Although we are incorporated outside the U.S., we have agreed to accept service of process in the U.S. through Cogency Global Inc., our agent designated for that purpose, located at 122 East 42nd Street, 18th Floor, New York, NY 10168. Nevertheless, since a substantial portion of the assets owned by us are located outside the U.S., any judgment obtained in the U.S. against us may not be collectible within the U.S.

An investor may or may not be able to commence an original action against us or our directors or officers, or any person, before the courts outside the U.S. to enforce liabilities under U.S. federal securities laws, depending on the nature of the action.

There is no treaty between the U.S. and Singapore providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters and a final judgment for the payment of money rendered by any federal or state court in the U.S. based on civil liability, whether or not predicated solely upon the federal securities laws, would, therefore, not be automatically enforceable in Singapore. In making a determination as to enforceability of a foreign judgment, the Singapore courts need to be satisfied that the foreign judgment was final and conclusive and on the merits of the case, given by a court of law of competent jurisdiction, and was expressed to be for a fixed sum of money. In general, a foreign judgment would be enforceable in Singapore unless procured by fraud, or if the proceedings in which such judgments were obtained were not conducted in accordance with principles of natural justice, or if the enforcement thereof would be contrary to the public policy of Singapore, or if the judgment would conflict with earlier judgments from Singapore or earlier foreign judgments recognized in Singapore, or if the judgment would amount to the direct or indirect enforcement of foreign penal, revenue or other public laws.

Civil liability provisions of the federal and state securities law of the U.S. permit the award of punitive damages against us, our directors and officers. The Singapore courts do not allow the enforcement of foreign judgments which amount to the direct or indirect enforcement of foreign penal, revenue or other public laws. It is uncertain as to whether a judgment of the courts of the U.S. awarding such punitive damages would be regarded by the Singapore courts as being pursuant to foreign, penal, revenue or other public laws. Such determination has yet to be conclusively made by a Singapore court in a reported decision.

In addition, holders of book-entry interests in our ordinary shares will be required to be registered as shareholders in our register of members in order to have standing to bring a shareholder suit and, if successful, to enforce a foreign judgment against us, our directors or our executive officers in the Singapore courts, subject to applicable Singapore laws. A holder of book-entry interests in our ordinary shares may become our registered shareholder by exchanging its interest in our ordinary shares for certificated ordinary shares and being registered in our register of members. The administrative process of becoming a registered shareholder could result in delays prejudicial to any legal proceeding or enforcement action.

Vietnam

Vietnam is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), and a few bilateral treaties relating to the recognition and enforcement of foreign judgments but not to any other multinational treaty in this regard. Foreign arbitral awards can be enforceable in Vietnam under the New York Convention after being recognized by Vietnamese courts in accordance with statutory procedures. However, in principle, Vietnam’s Civil Procedure Code provides that a

 

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civil judgment or decision of a foreign court is enforceable in Vietnam only if there is a treaty in this regard between Vietnam and such foreign country (including international treaties) or on a reciprocal basis. Vietnam’s Civil Procedure Code also sets out several grounds for Vietnamese courts to refuse the recognition and enforcement of foreign judgments and decisions or foreign arbitral awards. Therefore, it may be difficult to enforce in Vietnam any judgment or decision issued by a U.S. court against us or our directors and officers who are citizens of Vietnam.

 

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CORPORATE HISTORY AND STRUCTURE

Corporate History

We commenced operations in June 2017 in Hanoi, Vietnam, through VinFast Vietnam. In May 2018, VinFast Vietnam changed its name to VinFast Trading and Production Limited Liability Company and our head office was relocated to Hai Phong, Vietnam. The construction of our electric scooter manufacturing plant was completed in April 2018 and we started production of our first electric scooter model, branded Klara, in November 2018. We broke ground on our automobile manufacturing plant in September 2017 and officially launched the plant in June 2019.

In December 2021, VinFast Vietnam was converted into a joint stock company under the name, VinFast Trading and Production Joint Stock Company.

Reorganization

To facilitate our public listing, we established our offshore holding structure through a series of transactions that resulted in VinFast Vietnam’s operations being reorganized under the Singapore-incorporated registrant, VinFast Auto Pte. Ltd. On July 31, 2023, we converted from a Singapore private limited company operating under the name “VinFast Auto Pte. Ltd.” into a Singapore public limited company operating under the name “VinFast Auto Ltd.”

Vingroup and VIG made initial equity capital contributions in cash in VinFast. VinFast acquired an aggregate 99.9% voting interest in VinFast Vietnam in January 2022 from its controlling shareholders, in consideration for cash equivalent to the initial equity capital contributions into the registrant as well as non-interest bearing promissory notes with an aggregate principal amount of approximately VND50.0 trillion (the “Share Acquisition P-Notes”) issued by VinFast to the controlling shareholders of VinFast Vietnam. As a result of these transactions, the former majority shareholders of VinFast Vietnam, being Vingroup and VIG, became the majority shareholders of VinFast and VinFast Vietnam became a subsidiary of VinFast. These transactions, which are described below, are referred to collectively as the “Reorganization.”

In June 2022, VIG assigned the Share Acquisition P-Note that it held, amounting to VND24.2 trillion ($1,017.2 million), to VinFast Vietnam to partially settle its payment obligations to us pursuant to the ICE Assets Disposal Agreements. In November 2022, our payment obligations related to such assigned Share Acquisition P-Note were subsequently eliminated on a consolidated group basis when we completed the ICE Assets Disposal.

In December 2022, Vingroup assigned the Share Acquisition P-Note that it held, amounting to VND25.8 trillion ($1,083.3 million), to VinFast Vietnam in return for the issuance of dividend preference shares in VinFast Vietnam (the “Recapitalization”). The dividend preference shares entitle the holder to annual dividends of 0.01% of the offering price of their dividend preference shares in each year that VinFast Vietnam has positive net retained earnings (after deducting all dividend payments made in that year). Timing for payment of annual dividends on the dividend preference shares shall be determined at the general meeting of shareholders of VinFast Vietnam. The dividend preference shares are transferrable, non-redeemable and carry no voting rights.

As a result of the transactions described above, there were no payable amounts outstanding in respect of the Share Acquisition P-Notes on a consolidated basis as of December 31, 2022.

Phase-out of ICE Vehicle Production

Our company was established in Vietnam in 2017 and commenced the production of ICE vehicles in 2019. Our operations prior to 2021 have focused primarily on the manufacture and sale of ICE vehicles and e-scooters. Our ICE vehicle models are: the Fadil (A-segment), the Lux A (E-segment), the Lux SA (E-segment SUV) and

 

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the President (E-segment SUV). Since commencing vehicle production in 2019, the majority of the approximately 105,000 vehicles that we have delivered through the end of June 2023 have been ICE vehicles. We sold approximately 24,200 ICE vehicles in 2020, approximately 35,600 in 2021 and approximately 16,800 in 2022.

We fully phased-out production of ICE vehicles in early November 2022 in connection with our strategic decision to transform into an EV-only manufacturer. As part of this transformation into an EV-only manufacturer, in 2022, we entered into a series of agreements with VIG (as amended, the “ICE Assets Disposal Agreements”) to transfer a portion of our assets used exclusively in the production of ICE vehicles (the “ICE Assets”) to VIG. We refer to these ICE assets disposal transactions as the “ICE Assets Disposal.” After the ICE Assets were legally transferred to VIG in June 2022, a portion of these assets was leased back until early November 2022, at which time we fully phased out production of ICE vehicles and the ICE Assets Disposal was deemed to have been completed.

The ICE Assets that we transferred to VIG comprise certain machinery, equipment, tooling and production lines that were used exclusively in the production of our ICE vehicles and that we determined could not be retooled for EV production, as well as other technologies used in the production of our ICE vehicles. The consideration for the ICE Assets was VND28,999.0 billion ($1,218.4 million), inclusive of taxes, which was the amount agreed among the parties with reference to the estimated book value of the ICE Assets under Vietnamese accounting standards.

VIG settled a portion of the consideration for the ICE Assets Disposal amounting to VND24.2 trillion ($1,017.2 million) through the assignment of the Share Acquisition P-Note held by VIG to VinFast Vietnam and a payment of VND2.0 trillion ($84.0 million) to VinFast Vietnam in June 2022 and VND1.1 trillion ($46.2 million) through set-off against outstanding fixed rental fee receivables for the leased-back period from VinFast Vietnam. Our payment obligations related to the assigned Share Acquisition P-Note were subsequently eliminated when we completed the ICE Assets Disposal in early November 2022 at a net gain of VND13.6 trillion ($571.4 million), which was recognized as a deemed contribution arising from the ICE Assets Disposal. Accordingly, as of September 30, 2023, the amount of consideration for the ICE Assets Disposal which remains outstanding is approximately VND1.6 trillion ($68.2 million). This amount is required to be paid within 24 months from the completion of the transfer.

VIG has agreed that, in the event that VIG disposes of the ICE Assets to any independent third-party (by reference to ownership or management control) for cash (the terms and timing of which we do not control), it will reinvest in VinFast Vietnam any and all of the portion of net disposal proceeds that exceeds the amount of the cash payments that VIG has made and will make to VinFast Vietnam, as described above.

Notwithstanding the ICE Assets Disposal and the cessation of production of ICE vehicles in early November 2022, our results of operations in 2022 and the six months ended June 30, 2023 include results of our ICE vehicle manufacturing business because we delivered ICE vehicles during such periods. We retained all servicing, warranty and other obligations and liabilities related to ICE vehicles that we have produced and we retained all rights, obligations and liabilities under ICE vehicle-related supplier contracts that we are not able to novate to VIG, Vingroup or other parties outside of our Group.

We have incurred and will incur additional costs associated with break fees or settlement costs related to our outstanding obligations under such contracts, which will be recorded in our consolidated statements of operations as compensation expenses.

We have retained the balance of our ICE Assets that are not transferred to VIG, which comprise our rights, interests and obligations under various license agreements with international car manufacturers related to licenses used in the production of our ICE vehicles.

 

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Vingroup Exchangeable Bonds due 2027

On April 29, 2022 and June 4, 2022, our company and Vingroup entered into the Vingroup EB Subscription Agreements (as defined herein) with certain investors pursuant to which Vingroup agreed to issue to such investors, and such investors agreed to subscribe for, $625.0 million in aggregate principal amount of Exchangeable Bonds (as defined herein). The Exchangeable Bonds were issued on May 10, 2022 and June 10, 2022, but form a single series and rank equally in all respects. As of June 30, 2023, the aggregate principal amount of outstanding Exchangeable Bonds was $625.0 million. For more information, see “Related Party Transactions—Vingroup Exchangeable Bonds.”

Organizational Structure

The following chart summarizes our corporate structure setting forth our ownership interest and the country of incorporation for each of our principal operating subsidiaries as of the date of this prospectus.

 

 

LOGO

 

Notes:

(1)

Based on proportion of voting power held. VinFast owns 39.09% of this subsidiary’s total outstanding share capital, including non-voting preferred shares.

(2)

Formerly Black Spade Acquisition Co.

(3)

For the purposes of homogenizing the organizational structure of our distribution companies, we are in the process of transferring the shares of VinFast Germany to Vingroup Investment. Following such transfer, VinFast will own VinFast Germany through Vingroup Investment.

(4)

For the purposes of homogenizing the organizational structure of our US subsidiaries, we are in the process of merging VinFast OEM US Holding, Inc. with Vingroup USA, with Vingroup USA as the surviving entity. Following this reorganization, VinFast Manufacturing US, LLC will become a wholly-owned subsidiary of Vingroup USA.

 

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SELECTED CONSOLIDATED FINANCIAL DATA

The financial information in this prospectus as of December 31, 2021 and 2022 and for the years then ended and as of June 30, 2023 and for the six months ended June 30, 2022 and 2023 has been derived from the consolidated financial statements of VinFast Auto Ltd., which are included elsewhere in this prospectus. The financial statements of VinFast Auto Ltd. are prepared in accordance with U.S. GAAP.

We fully phased out production of ICE vehicles in early November 2022 in connection with our strategic decision to transform into an EV-only manufacturer. Accordingly, our historical results for any prior period are not necessarily indicative of results expected in any future period.

You should read this “Selected Consolidated Financial Data” section together with the consolidated financial statements included elsewhere in this prospectus and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Consolidated Balance Sheet Data

 

     As of December 31,     As of June 30,  
     2021     2022     2023  
     VND
(in billions)
    VND
(in billions)
    USD (in
millions)
    VND
(in billions)
    USD
(in millions)
 

Cash and cash equivalents

     3,024.9       4,271.4       179.5       1,600.7       67.3  

Inventories, net

     6,683.7       21,607.3       907.9       24,022.1       1,009.3  

Short-term amounts due from related parties

     1,997.2       1,978.1       83.1       391.8       16.5  

Total current assets

     26,692.5       44,838.6       1,884.0       39,202.3       1,647.2  

Property, plant and equipment, net

     51,788.3       57,188.7       2,402.9       63,322.2       2,660.6  

Total assets

     85,321.5       113,605.3       4,773.3       116,828.3       4,908.8  

Amounts due to related parties

     56,035.3       17,325.3       728.0       42,208.0       1,773.4  

Total current liabilities

     87,305.3       66,225.2       2,782.6       91,686.3       3,852.4  

Long-term interest-bearing loans and borrowings

     31,343.1       41,625.0       1,748.9       40,731.0       1,711.4  

Total non-current liabilities

     74,957.4       84,050.6       3,531.5       88,465.9       3,717.1  

Ordinary Shares – VinFast Auto Ltd. (2,299,999,998 shares, no par value, issued and outstanding as of December 31, 2022 and June 30, 2023)(1)

     553.9       871.0       36.6       871.0       36.6  

Accumulated losses

     (77,416.9     (127,188.5     (5,344.1     (153,785.0     (6,461.6

Deficit attributable to equity holders of the parent

     (76,926.5     (114,109.8     (4,794.5     (140,703.8     (5,911.9

Non-controlling interests(2)

     (14.7     77,439.4       3,253.8       77,379.9       3,251.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deficit

     (76,941.2     (36,670.5     (1,540.8     (63,323.9     (2,660.7

 

Notes:

(1)

In January 2022, the Company effected a 100-for-one split of ordinary shares. On August 1, 2023, the shareholders of the Company approved the consolidation of 2,412,852,458 existing ordinary shares in the capital of the Company (“Existing Shares”) held by shareholders of the Company into 2,299,999,998 ordinary shares in the capital of the Company (the “Consolidated Shares”) without any change in the paid-up share capital amount. All shares and per share amounts presented in the consolidated financial statements have been revised on a retroactive basis to give effect to the share split and the share consolidation.

(2)

Non-controlling interests reflect certain dividend preference shares issued by VinFast Vietnam to Vingroup (i) in March 2022 in return for an advance capital contribution of VND6.0 trillion ($252.1 million) (“DPS1”), (ii) in December 2022 in exchange for VND45,733.7 billion ($1,921.6 million) in borrowings from VinFast Vietnam to Vingroup (“DPS4”) and (iii) as part of our Reorganization in December 2022, in return for the assignment of the Share Acquisition P-Note previously held by Vingroup amounting to VND25.8 trillion ($1,083.3 million) (“DPS3”). For details on the terms of DPS1, DPS3 and DPS4, see note 20 to our consolidated financial statements included elsewhere in this prospectus and also see “Related Party Transactions—Transactions with Vingroup Affiliates—Capital Contributions to VinFast Vietnam.”

 

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Consolidated Statements of Operations

 

     For the Year Ended December 31,     For the Six Months Ended June 30,  
     2021     2022     2022     2023  
    

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

   

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

 

Revenues

            

Sales of vehicles

     13,898.6       12,391.5       520.7       6,080.5       9,024.5       379.2  

Sales of merchandise

     1,405.4       112.2       4.7       46.4       38.3       1.6  

Sales of spare parts and components

     538.2       2,072.6       87.1       1,035.4       372.3       15.6  

Rendering of services

     96.6       222.7       9.4       109.1       173.0       7.3  

Rental income

            

Revenue from leasing activities

     89.4       166.5       7.0       46.3       316.1       13.3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues (*)

     16,028.2       14,965.6       628.8       7,317.7       9,924.2       417.0  

Cost of vehicles sold

     (23,327.0     (24,660.1     (1,036.1     (11,329.9     (15,439.2     (648.7

Cost of merchandise sold

     (1,398.3     (151.4     (6.4     (46.2     (38.5     (1.6

Cost of spare parts and components sold

     (437.2     (1,869.1     (78.5     (896.2     (230.8     (9.7

Cost of rendering services

     (65.4     (389.6     (16.4     (133.7     (388.6     (16.3

Cost of leasing activities

     (56.1     (162.3     (6.8     (44.4     (350.4     (14.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of sales

     (25,284.0     (27,232.5     (1,144.2     (12,450.4     (16,447.5     (691.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross loss

     (9,255.8     (12,266.9     (515.4     (5,132.7     (6,523.4     (274.1

Operating expenses:

            

Research and development costs

     (9,255.4     (19,939.9     (837.8     (10,447.8     (8,620.8     (362.2

Selling and distribution costs

     (2,203.8     (5,213.7     (219.1     (2,291.6     (2,569.1     (107.9

Administrative expenses

     (2,424.6     (4,010.0     (168.5     (1,123.3     (2,560.9     (107.6

Compensation expenses

     (4,340.3     (109.4     (4.6     —        —        —   

Net other operating (expenses)/income

     412.5       (716.4     (30.1     (615.5     (98.5     (4.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (27,067.4     (42,256.4     (1,775.5     (19,610.9     (20,372.7     (856.0

Finance income

     446.1       88.1       3.7       79.6       41.3       1.7  

Finance costs

     (4,598.2     (7,959.8     (334.4     (3,426.9     (5,072.5     (213.1

Net (loss)/gain on financial instruments at fair value through profit or loss

     (1,710.0     1,226.0       51.5       660.3       (1,279.1     (53.7

Investment gain

     956.6       —        —        —        —        —   

Share of losses from equity investees

     (36.8     —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income tax expense

     (32,009.7     (48,902.1     (2,054.7     (22,297.9     (26,683.1     (1,121.1

Tax (expense)/income

     (209.2     (946.7     (39.8     (1,014.2     27.0       1.1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss for the year/period

     (32,219.0     (49,848.9     (2,094.5     (23,312.2     (26,656.0     (1,120.0

 

(*)

Including sales to related parties in 2021, 2022 and the six months ended June 30, 2022 and 2023 of VND516.5 billion, VND2,378.9 billion ($100.0 million), VND1,169.7 billion and VND5,833.9 billion ($245.1 million), respectively.

 

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Consolidated Cash Flows Data

 

     For the Year Ended December 31,     For the Six Months Ended June 30,  
     2021     2022     2022     2023  
    

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

   

VND

(in billions)

   

VND

(in billions)

   

USD

(in millions)

 

Net cash flows used in operating activities

     (28,969.1     (35,628.4     (1,497.0     (15,580.7     (21,186.3     (890.2

Net cash flows (used in)/from investing activities

     2,420.1       (16,038.9     (673.9     (5,319.7     (14,258.9     (599.1

Net cash flows from financing activities

     28,855.2       52,945.1       2,224.6       19,798.5       33,417.0       1,404.1  

Net (decrease)/increase in cash, cash equivalents and restricted cash

     2,306.2       1,277.7       53.7       (1,101.9     (2,028.2     (85.2

Cash, cash equivalents and restricted cash at the end of the year/period

     3,024.9       4,271.4       179.5       1,926.5       2,267.7       95.3  

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

The following unaudited pro forma condensed combined financial statements present the combination of the financial information of VinFast and Black Spade adjusted to give effect to (i) the consummation of the Transactions, as described below under the heading, “Description of the Transactions,” (ii) the Gotion Investment which is described below under the heading “Gotion Investment,” and (iii) the phase-out of ICE vehicle production (the “ICE Production Phase-out”), which is described in this prospectus under the section titled “Corporate History and Structure—Phase-out of ICE Vehicle Production.” The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Defined terms included in these financial statements have the same meaning as terms defined and included elsewhere in this prospectus.

The following unaudited pro forma condensed combined balance sheet as of June 30, 2023 combines the unaudited historical condensed consolidated balance sheet of VinFast as of June 30, 2023 with the unaudited historical condensed balance sheet of Black Spade as of June 30, 2023, as if the Transactions and the Gotion Investment had been completed on June 30, 2023.

The following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2022 combines the audited historical consolidated statements of operations of VinFast for the year ended December 31, 2022 with the audited historical statements of operations of Black Spade for the year ended December 31, 2022, as if the Transactions, the Gotion Investment and the ICE Production Phase-out had been completed on January 1, 2022.

The following unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2023 combines the unaudited historical condensed consolidated statements of operations of VinFast for the six months ended June 30, 2023 with the unaudited historical condensed statements of operations of Black Spade for the six months ended June 30, 2023, as if the Transactions, the Gotion Investment and the ICE Production Phase-out had been completed on January 1, 2022.

The historical financial information of Black Spade was derived from its audited historical financial statements for the year ended December 31, 2022 and its unaudited historical condensed financial statements for the six months ended June 30, 2023. The historical financial information of VinFast was derived from its audited historical consolidated financial statements for the year ended December 31, 2022 and its unaudited historical condensed financial statements for the six months ended June 30, 2023, included elsewhere in this prospectus. The unaudited pro forma condensed combined financial information and the accompanying notes should be read together with VinFast’s and Black Spade’s financial statements and related notes, the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The pro forma adjustments related to the Transactions and the Gotion Investment, which we refer to as the “Transactions Accounting Adjustments,” and the pro forma adjustments related to the ICE Production Phase-out, which we refer to as the “ICE Production Phase-out Accounting Adjustments,” collectively, are described in the notes to the unaudited pro forma consolidated financial information.

The unaudited pro forma condensed combined statements of operations (i) are based on information currently available, (ii) are intended for informational purposes only, (iii) are not necessarily indicative of and do not purport to represent what our operating results would have been had the Transactions, the Gotion Investment and the ICE Production Phase-out occurred as described or what our future operating results will be after giving effect to these events, and (iv) do not reflect all actions that may be undertaken by us after the Transactions, the Gotion Investment and the ICE Production Phase-out.

 

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Description of the ICE Production Phase-out

Please refer to the section titled “Corporate History and Structure—Phase-out of ICE Vehicle Production,” in this prospectus.

Description of the Transactions

On May 12, 2023, Black Spade entered into the Business Combination Agreement with VinFast and Merger Sub, a wholly owned subsidiary of VinFast. Pursuant to the Business Combination Agreement, on August 11, 2023, Merger Sub merged with and into Black Spade, with Black Spade surviving the merger and becoming a wholly owned subsidiary of VinFast, and the securityholders of Black Spade becoming securityholders of VinFast. On August 15, 2023, VinFast’ s shares and warrants commenced trading on Nasdaq under the ticker symbols “VFS” and “VFSWW,” respectively.

Pursuant to the Business Combination Agreement, (a) each Class A ordinary share of Black Spade outstanding (“Black Spade Public Shares”) immediately prior to the Effective Time was converted into one VinFast ordinary share (all holders of Class A ordinary shares of Black Spade, the “Black Spade Public Shareholders”), (b) each Class B ordinary share of Black Spade outstanding immediately prior to the Effective Time was converted into one VinFast ordinary share, and (c) each Black Spade warrant outstanding immediately prior to the Effective Time was assumed by VinFast and exchanged for a VinFast warrant, with the number of VinFast ordinary shares underlying the VinFast warrants and the exercise price of such VinFast warrants subject to adjustment in accordance with the Business Combination Agreement in the event of a stock split, share dividend or distribution, or any change in VinFast’s share capital by reason of any recapitalization, reclassification, exchange of shares.

The unaudited pro forma condensed combined financial information has been prepared to reflect (i) the actual redemption of 15,591,100 shares of Class A ordinary shares issued in Black Spade’s initial public offering by the Black Spade Public Shareholders prior to the consummation of the Business Combination, (ii) the Backstop Subscriber’s subscription for 1,636,797 ordinary shares of VinFast pursuant to the terms of the Sponsor Support and Lock-Up Agreement and Deed, dated as of May 12, 2023, as amended by the First Amendment to Sponsor Support and Lock-Up Agreement, dated as of June 14, 2023 (collectively, the “Sponsor Support Agreement”), and the Backstop Subscription Agreement dated August 10, 2023, (iii) the 4,929,684 ordinary shares issued to the Sponsor upon its cashless exercise of 6,380,000 Private Placement Warrants (as defined herein), and (iv) the 4,777,281 ordinary shares issued upon the exercise of 4,777,281 Public Warrants (as defined herein) by other securityholders.

The Business Combination will be accounted for as a recapitalization, with no goodwill or other intangible assets recorded, in accordance with US GAAP.

Gotion Investment

On June 30, 2023, VinFast entered into the Gotion Subscription Agreement pursuant to which Gotion undertook to subscribe for 15,000,000 ordinary shares at $10 per share for an aggregate subscription price of $150 million. The transaction was completed on September 20, 2023.

 

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Consideration

The following represents the aggregate consideration from the Transactions, the Gotion Investment and the exercises of warrants, assuming the outstanding VinFast warrants as of September 18, 2023 have not been exercised after September 18, 2023 and the Gotion Investment has been completed:

 

     Purchase Price      Shares Issued  
    

(VND in

millions)

        

Share Consideration for Business Combination(1)

     1,706,626        7,170,697  

Gotion Investment(1)

     3,570,000        15,000,000  

Cashless exercises of Private Placement Warrants(2)

     1,349,255        4,929,684  

Cash exercises of Public Warrants(2)

     1,307,542        4,777,281  

Notes:

(1)

The value of ordinary shares is reflected at $10 per share.

(2)

The value of ordinary shares underlying the warrants is reflected at $11.50 per share.

Ownership

The following summarizes the unaudited pro forma VinFast ordinary shares outstanding following the completion of the Business Combination based on the actual redemptions by the Black Spade Public Shareholders and the exercise of VinFast warrants through September 18, 2023, assuming no VinFast warrants outstanding as of September 18, 2023 have been exercised after September 18, 2023 and the Gotion Investment has been completed:

 

     Number of shares(1)      %  

Black Spade Public Shareholders:

     

Black Spade Public Shareholders(2)

     1,308,900        0.06
Exercises of Public Warrants(3)      4,777,281        0.20
     6,086,181        0.26

Sponsor and the other Initial Shareholders of Black Spade:

     

Founder(4)

     4,225,000        0.18
Exercises of Private Placement Warrants(5)      4,929,684        0.21
     9,154,684        0.39

Backstop financing:

     

Backstop(6)

     1,636,797 &