IN A financial move diametrically opposed to Western practice, the chairman of a company has pledged a billion-dollar, non-refundable donation to the company to allow it to continue development.

The chairman of Vietnam’s sole car-maker, VinFast, has promised $US1 billion ($A1.5b) – to be handed over within 2024 – while the parent company, Vingroup, will add another $US500 million ($A750m).

The chairman of VinFast and Vingroup, Mr Pham Nhat Vuong, said the parent company would also loan up to a further $US1 billion ($A1.5b) for a maximum of five years.

VinFast LLC is a Vietnamese-founded, Singaporean-based private automotive company.

VinFast is a Vietnamese electric car manufacturer that promises to bring affordable & luxury electric cars with powerful engines and once owned the former Holden proving ground.

Established in 2017, it is a member of the conglomerate organisation Vingroup, one of the largest private conglomerate in Vietnam that was founded by Phạm Nhật Vượng.

VinFast said in a statement that “The $US2.5 billion ($A3.75b) in grants and loans will facilitate VinFast’s continuing development enabling it to achieve its global growth goals.”

“To build a national brand that can compete in the international market is particularly difficult, challenging, and even requires sacrificing immediate benefits.

“Mr Pham Nhat Vuong plans to donate some of his personal assets to energise VinFast during the pivotal acceleration period to create a mark of Vietnam in the world’s electric vehicle market.

“The success of VinFast will promote the development of Vietnam’s industry and technology while actively contributing to the global green transformation.”

The company said that the decision to donate the $US1.5 billion ($A2.25b) and take up a loan of a further $US1 billion ($A1.5b) “was reached due to VinFast’s remarkable progress in the global market, as it continues to achieve its production and business development targets.”

“With further financial support, VinFast will have access to more resources to boost its development and accelerate its growth objectives in the global market.”

Vingroup CEO Mr Nguyen Viet Quang said: “The growth potential of VinFast has been demonstrated in the past five years.

“This is a pivotal period for VinFast to accelerate towards a solid competitive position in the world’s electric vehicle market. As the parent corporation of VinFast, Vingroup is providing support to enable VinFast to continue its development and secure its future.

“The grant and loan of $US1.5 billion ($A2.25b) is Vingroup’s additional capital contribution for the breakthrough development of VinFast in the future.

“This is also a once-in-a-lifetime opportunity for the development of Vietnam’s industry. We call on everyone to support and build a world-class Vietnamese brand.”

VinFast, a member of the diverse Vingroup business, was established in 2017. It became a pure EV company specialising in designing and manufacturing electric cars and motorbikes from 2022.

VinFast has introduced six EV passenger car and SUV models; one electric bus; and nine electric motorbikes. It has in March exported its first shipments to the US, its first market outside of Vietnam. It will launch in Canada this month and in France, Germany, and the Netherlands later this year.

VinFast delivered its first 45 cars to customers in California on March 2. It shipped 999 vehicles to California in November but faced more than two months of costly delays in preparing them for delivery.

In February, it cut the lease price on the VF8 electric crossover by 50 per cent, down from $US599 ($A900) a month (for 24 months) to $US399 ($A600).

It also took some flak from early reservation holders when it announced that the initial shipment of VF8 cars would have a lower battery range than first promised.

It has rebranded the VF8 as the City Edition Eco model, with a range of 333km, down from the 505km promised in its original marketing.

VinFast also dropped an option for consumers to rent the EV’s battery, a plan it had advertised as a way to bring down the cost of ownership.

The company is now waiting for final regulatory approval to begin construction of a $US4 billion ($A6b) vehicle manufacturing plant in North Carolina.

VinFast said that the plant, with phase one including capital expenditures for the construction of $US1.4 billion ($A2.1b), is expected to create more than 7000 jobs and produce 150,000 vehicles a year.

By Neil Dowling