VinFast Auto Ltd. ((VFS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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VinFast’s recent earnings call presented a mixed yet optimistic outlook for the company. The discussion highlighted significant achievements in delivery and revenue growth, alongside successful international expansion efforts. However, concerns were raised about negative gross margins, increased warranty provision rates, and substantial cash burn. Despite these challenges, the company’s strategic initiatives and growth potential suggest a positive trajectory.
Significant Delivery and Revenue Growth
VinFast reported impressive growth figures, with a 172% year-over-year increase in deliveries and a 92% rise in revenue for Q2 2025. This substantial growth underscores the company’s robust market presence and its ability to scale operations effectively.
Expansion of Manufacturing Capacity
The company has significantly bolstered its manufacturing capabilities by inaugurating two new factories in Vietnam and India. This expansion is set to enhance their design capacity, supporting the anticipated increase in production demands.
Strong Growth in E-Scooter Deliveries
VinFast’s e-scooter and electric bike segment experienced remarkable growth, with deliveries increasing by 55% quarter-over-quarter and 432% year-over-year in Q2 2025. This surge highlights the growing demand for sustainable transportation solutions.
Successful International Expansion
VinFast’s international expansion strategy is yielding positive results, with pre-booking launches in India and strategic partnerships in Southeast Asia, particularly in Indonesia and the Philippines. These moves are crucial for capturing new markets and diversifying revenue streams.
Strengthened Financial Position
The company’s financial standing was strengthened through a $1.6 billion spin-off of completed R&D assets to a new entity, Novatech. This strategic move is expected to provide significant financial support for VinFast’s long-term growth initiatives.
Negative Gross Margin
Despite the positive growth metrics, VinFast reported a negative gross margin of 41% in Q2 2025, worsening from negative 35% in Q1 2025. This decline is a critical area of concern that the company needs to address to improve profitability.
Increased Warranty Provision Rates
Higher warranty provision rates have impacted gross margins, reflecting the typical costs associated with early-stage products. This issue underscores the challenges of scaling new product lines.
High Cash Burn
VinFast’s operating cash flow was negative $463 million for Q2 2025, with expectations of a $400-600 million operating outflow per quarter in the near term. This high cash burn rate highlights the need for careful financial management as the company continues to expand.
Forward-Looking Guidance
Looking ahead, VinFast aims to double its 2024 delivery numbers by the end of 2025, driven by strong demand in Vietnam, international expansion, and new model launches like the VF 6 and VF 7. The company anticipates improvements in gross margins as new vehicle platforms and international operations scale, supported by the strategic spin-off of R&D assets, expected to bring in $1.6 billion in cash.
In summary, VinFast’s earnings call painted a picture of a company on the rise, with significant growth in deliveries and revenue, and successful international expansion. While challenges remain, particularly concerning profitability and cash flow, the company’s strategic initiatives and forward-looking guidance suggest a promising future.