VinFast Auto Ltd. ((VFS)) has held its Q1 earnings call. Read on for the main highlights of the call.
VinFast’s recent earnings call painted a picture of impressive growth and strategic ambition, tempered by ongoing financial challenges. The company showcased its remarkable achievements in delivery numbers and international expansion, while also addressing pressures on gross margins and rising operating expenses. Despite these hurdles, VinFast remains optimistic about its future, driven by innovation and market expansion.
Exceeding Delivery Targets
VinFast reported a stellar performance in 2024, delivering 97,399 electric vehicles globally, far exceeding its initial target of 80,000. The fourth quarter alone saw a remarkable surge, with 53,139 vehicles delivered, marking a 143% increase from the previous quarter and a 342% rise year-over-year.
International Expansion
The company’s international sales saw a tenfold increase year-over-year, growing from 3% to 10% of total deliveries. This growth was supported by a significant expansion in showroom presence, with a 160% increase in the number of showrooms by March 2025.
Improved Gross Margin
VinFast made strides in improving its gross margin, which excluding certain charges, improved to -32% from -40% in 2023. The fourth quarter saw a reduction in average unit BOM and production costs for EVs by 16% and 43%, respectively.
Strategic Partnerships and Ecosystem Development
To bolster its market position, VinFast launched new entities like GSM and V-Green, aiming to create a green mobility ecosystem. This initiative seeks to mitigate consumer skepticism by providing low-risk exposure to EVs before purchase.
Capital Support and Liquidity
The company strengthened its financial position with over $1.5 billion in disbursements from its founder and loans, maintaining a liquidity position of approximately $3 billion as of March 2025.
Gross Margin Challenges
Despite improvements, VinFast faced challenges with its gross margin in Q4 2024, impacted by an accounting charge related to a free charging program, resulting in a reported gross margin of -79% for the quarter.
High Operating Costs
Operating expenses surged in Q4 2024, with SG&A expenses increasing by 89% quarter-over-quarter and 108% year-over-year, driven by scaling sales operations and impairment charges.
Continued Net Loss
The company reported a net loss of -$3.2 billion for the full year 2024, despite some improvements in financial metrics.
High Cash Burn
VinFast continues to experience significant cash burn, with operating cash burn slightly reduced to $1.25 billion in 2024.
Tariff and Market Challenges
VinFast is facing potential risks from new U.S. tariffs, which could impact its sales and market strategy. The company is taking steps to mitigate these challenges.
Forward-Looking Guidance
Looking ahead, VinFast aims to double its 2024 delivery numbers in 2025, with a strong focus on expanding its market share in Vietnam and international markets, particularly in Asia. The company plans to leverage new CKD plants in Asia, expected to add a capacity of up to 300,000 vehicles annually. VinFast is committed to product innovation, focusing on affordability and quality, with the goal of achieving full-year EBITDA profitability while navigating macroeconomic uncertainties.
In conclusion, VinFast’s earnings call highlighted a company on the rise, with impressive growth in deliveries and international expansion. However, challenges such as gross margin pressures and high operating costs remain. The company’s forward-looking guidance reflects optimism, with ambitious targets for 2025 driven by market expansion and product innovation.