Vietnam carmaker VinFast poised to meet year's 80,000 EV delivery target: exec

Vietnam's electric vehicle manufacturer VinFast is expected to finish 2024 "on a strong note" and meet its 80,000-vehicle delivery target, as the momentum in Q3 has continued into Q4, says its top leader.

Thuy Le, chairwoman of VinFast Auto Ltd. (Nasdaq:VFS), said the EV startup's Q3 result was underpinned by a robust September, as it recorded the highest monthly deliveries in its home market, Vietnam.

This marked a historic milestone for Vietnam’s automotive industry where, for the first time since VinFast was established seven years ago, a domestic OEM (original equipment manufacturer) had outperformed international competitors to become the market leader across the passenger vehicle market.

"The path to green mobility is challenging, but our commitment to this future is resolute - because the future is, without question, electric,” Thuy Le noted in a corporate release on Tuesday.

According to its unaudited financial results for Q3 ending September 30, 2024, VinFast recorded strong Q3 results, delivering 21,912 vehicles, a 66% rise from Q2 and a 115% year-over-year increase. Revenue reached $511.6 million, up 42.2% from Q2 and up 49.3% year-over-year.

The company became the top-selling automotive brand in Vietnam for September, October, and for the first 10 months of 2024 while continuing to make strides in its global expansion, it said in the statement.

In October, it delivered more than 11,000 EVs to customers in Vietnam, representing a 21% increase compared to September and bringing total deliveries in Vietnam to more than 51,000 EVs from January 1 to October 31.

The gross margin in Q3 was negative 24%, according to the unaudited financial statements. This represents a significant improvement compared to the negative 27% margin in the same quarter of the previous year and the negative 62.7% recorded in Q2/2024.

Net loss was VND13,251,944 million ($550 million) in Q3, down 29.2% from Q2/2024 and down 14.8% from Q3/2023.

Lan Anh Nguyen, chief financial officer of the EV startup, said Q3 was in line with the company's internal forecast, driven by an acceleration in its top line and an improvement in profitability as gross loss and net loss narrowed significantly.

"Increasing scale, ongoing BOM and production cost optimization and improved operating efficiencies have already started to have a positive impact on gross margin and will continue to be key drivers for VinFast path to profitability," she added.

She noted that VinFast's overall liquidity position has been enhanced by the recently announced loans from parent corporation Vingroup and grants from its founder, Pham Nhat Vuong, whereby the firm expects to receive a potential of $3.5 billion injection by the end of 2026.

In response to increasing demand for affordable EVs and to improve production efficiencies, the company plans to add a new completely knocked down (CKD) factory in Ha Tinh province, central Vietnam, focusing on VF 3 and VF 5.

The factory will be under a long-term lease structure to optimize initial spendings. The factory targets a maximum capacity of 300,000 EVs per year, subject to demand and general market conditions, with a gradual ramp up in capacity and production overtime.

The construction of the factory will begin in early December, and the factory is expected to commence operations in 2025.

As of October 31, 2024, VinFast had possessed 173 showrooms globally for EVs and 160 showrooms and service workshops for e-scooters, including VinFast showrooms and dealer showrooms.

Its acceleration towards a dealership model as part of its international strategy is starting to pay off. September was a record-breaking month for VinFast in North America, driven by a growing dealer network and continuous improvements to its EVs. In November, VinFast started delivering the VF 9 to customers in the U.S. and Canada.

In Indonesia, VinFast has initiated the delivery of its first right-hand drive VF e34 and VF 5, with a growing network of 17 dealerships spanning 15 cities as of October 31, 2024. The company is also working on its plant in Subang, scheduled to commence operations in 2025.

In the Philippines, VinFast opened reservations for three models – the VF 3, VF 5, and VF 7. As of October 31, the carmaker had set up eight dealer stores in six Philippine cities.

VinFast's Indian plant, with an annual capacity of 50,000 EVs, is gearing up for equipment and machinery installation. The plant is scheduled to begin operations in 2025.

VinFast also officially launched its brand in the Middle East in October, opening its first dealership in United Arab Emirates, located in downtown Dubai.

VinFast has received financial backing from its founder and parent company. VinFast’s founder and chief executive officer, Pham Nhat Vuong, and his associated companies intend to provide up to VND50 trillion ($2.1 billion) in free grants to the company and its subsidiaries through the end of 2026.

In addition, parent corporation Vingroup intends for it and its subsidiaries (collectively “Vingroup”) to provide VinFast’s subsidiaries incorporated in Vietnam with up to VND35 trillion ($1.5 billion) in loans through the end of 2026.

Vingroup has approved a plan for additional capital contributions to VFTP, a direct subsidiary of VinFast holding the company’s EV manufacturing business in Vietnam, by converting up to VND80 trillion ($3.3 billion) of loans extended by Vingroup to VFTP into preference shares issued by VFTP.