VinFast’s Earnings Call: Achievements Amid Challenges

VinFast Auto Ltd. ((VFS)) has held its Q4 earnings call. Read on for the main highlights of the call.

During the recent earnings call, VinFast Auto Ltd. shared a mix of achievements and challenges that painted a complex picture of its current financial standing. The company celebrated surpassing delivery targets and expanding its international footprint, particularly in Southeast Asia. However, these successes were overshadowed by ongoing financial losses and difficulties in the U.S. market. Despite strategic efforts to enhance performance, financial hurdles persist, impacting the overall sentiment of the call.

Exceeding Delivery Targets

VinFast achieved a significant milestone by delivering 97,399 electric vehicles globally in 2024, surpassing its target of 80,000. This accomplishment highlights the company’s robust production capabilities and growing consumer demand for its vehicles.

International Expansion Success

The company reported a tenfold increase in sales outside Vietnam, with international deliveries now accounting for 10% of total sales, up from 3% the previous year. This growth underscores VinFast’s successful penetration into new markets.

Significant Growth in Southeast Asia

VinFast recorded impressive growth in Southeast Asia, with Q4 2024 deliveries reaching 53,139 vehicles, marking a 43% increase quarter-over-quarter and a staggering 342% year-over-year.

Market Leadership in Vietnam

In its home market, VinFast captured a 20% share of the total passenger vehicle market, a significant leap from 2% in 2023, solidifying its position as a market leader.

Strategic Partnerships and Ecosystem Development

The company expanded its green mobility ecosystem in Indonesia and the Philippines, establishing charging networks and launching electric vehicle taxis, further cementing its commitment to sustainable transportation.

Improved Gross Margin

VinFast reported an improvement in its full-year gross margin, excluding certain charges, to minus 32% from minus 40% in 2023, indicating progress in cost management.

Strong Cash Position

With a liquidity position of approximately $3 billion as of March 31, 2025, and substantial capital support from its founder, VinFast maintains a strong financial footing to support its strategic initiatives.

Continued Losses

Despite its successes, VinFast reported a full-year net loss of $3.2 billion, with Q4 EBITDA losses widening to minus $928 million, highlighting ongoing financial challenges.

Negative Gross Margin Impact

The company’s Q4 2024 gross margin was significantly impacted by a free charging program, resulting in a minus 79% margin, reflecting the financial strain of promotional activities.

Price Decline Due to Product Mix

A shift towards lower-priced models led to a decrease in the average selling price, with Q4 figures at approximately $16,000, down from $20,700 in Q3, affecting revenue.

High Operating Expenses

VinFast’s Q4 2024 SG&A expenses surged by 89% quarter-over-quarter, indicating increased operational costs that need addressing.

Challenges in the US Market

The company announced plans to close its direct-to-consumer showrooms in California by June 2025, transitioning to a dealership model, as part of its strategy to overcome market challenges.

Forward-Looking Guidance

Looking ahead, VinFast aims to double its 2024 delivery figures in 2025, with significant contributions expected from international markets, particularly Indonesia, the Philippines, and India. The company plans to invest $1.8 billion in CapEx and R&D to support growth and enhance manufacturing capacity, aiming to add up to 300,000 vehicles per year. Despite a challenging macroeconomic environment, VinFast remains focused on optimizing costs and achieving profitability.

In conclusion, VinFast Auto Ltd.’s earnings call highlighted a blend of achievements and challenges. While the company made significant strides in delivery targets and international expansion, financial losses and market challenges persist. Moving forward, VinFast’s strategic investments and focus on cost optimization will be crucial in navigating the competitive EV landscape and achieving long-term success.