VinFast guns for 300,000 EV deliveries in 2026, spins off manufacturing operations

VinFast, the EV arm of Vietnamese conglomerate Vingroup (HoSE: VIC)⁠ targets at least 300,000 electric vehicle deliveries globally this year, up 52% year-on-year, while pursuing a restructuring plan aimed at improving capital efficiency, according to a report by Vietcap Securities⁠.

The Nasdaq-listed EV manufacturer delivered 58,577 electric cars worldwide in the first quarter of 2026, up 61% from a year earlier. Vietnam remained its core market, accounting for about 92% of total deliveries during the period.

Electric scooter sales expanded even faster, with deliveries surging 219% year-on-year to 143,136 units. Sales to related parties, primarily ride-hailing operator GSM⁠, declined around 13% for EV deliveries and 1% for electric scooter sales.

In the first four months of 2026, VinFast delivered 78,458 electric vehicles in Vietnam, a 76% increase from the same period last year.

Management said the company retained its position as Vietnam’s largest automobile brand in Q1 and became the country’s second-largest motorcycle manufacturer with a 17% market share as of March 2026. The company aims to be break-even in Vietnam by 2027.

Outside its home market, VinFast said it ranks as the leading EV brand in the Philippines, fourth in India, and eighth in Indonesia.

Growth expectations are supported by a major long-term supply agreement signed in May between VinFast and GSM.

Under the framework agreement, VinFast will supply approximately one million electric cars and four million electric motorcycles to GSM between 2026 and 2030, creating a substantial order pipeline for the automaker.

GSM, 95% owned by Vingroup's billionaire chairman Pham Nhat Vuong, is expanding internationally. On June 5, the company launched its Green SM Limo service in New Delhi, marking its entry into India. The ride-hailing operator now operates across five countries: Vietnam, Laos, Indonesia, the Philippines, and India.

Spin off manufacturing assets

As part of its efforts to improve financial efficiency, VinFast plans to separate its manufacturing facilities in the northern city of Hai Phong and the central province of Ha Tinh into an independent legal entity.

Following the restructuring, the company intends to focus on higher-value activities including research and development, technology, branding, sales, and after-sales services, while production would be carried out through long-term manufacturing contracts with the new entity.

Management indicated the transaction could generate a one-time gain, although the value and treatment of the gain are still being evaluated.

The move is viewed as a significant step toward reducing capital intensity and improving the company’s long-term financial profile.

Additionally, VinFast continues to rely heavily on financial support from founder Pham Nhat Vuong and parent company Vingroup⁠.

Under financing arrangements announced in late 2024, Vuong committed up to VND50 trillion ($1.9 billion) in support for the EV maker, while Vingroup provided a credit facility worth up to VND35 trillion ($1.33 billion).

By the end of the first quarter, VinFast had received VND33 trillion ($1.25 billion) from the founder’s support package. Outstanding borrowings from Vingroup stood at nearly VND19.8 trillion ($752.57 million).

That leaves approximately VND17 trillion ($646.15 million) available from Vuong’s commitment and about VND15.2 trillion ($577.73 million) in undrawn credit from Vingroup for the remainder of 2026.

Q1 earnings performance

VinFast's Q1 revenue climbed 42% year-on-year to VND23.11 trillion ($878.42 million), reflecting strong delivery growth.

However, it reported a net loss of VND28.14 trillion ($1.07 billion) in January-March. Although the loss narrowed from the previous quarter, it remained substantially higher than the VND17.67 trillion ($681.69 million) loss recorded a year earlier.

Gross margin deteriorated to negative 74%, compared with negative 35% in Q1/2025.

Management attributed the weaker margin primarily to an extension of free-charging incentives, deferred revenue recognition for some delivered vehicles, and inventory valuation adjustments.

Excluding these accounting-related factors, adjusted gross margin improved significantly to negative 22.5%, compared with negative 47% in Q4/2025.

As of March 31, VinFast carried approximately VND84.7 trillion ($3.22 billion) in third-party debt, while payables to related parties totaled VND64.5 trillion ($2.45 billion). Cash and cash equivalents fell to VND5.5 trillion ($209.24 million) from VND7.35 trillion ($279.44 million) recorded at end-2025.

The company spent VND18.3 trillion ($695.56 million) on operating activities and capital investments during Q1. Management said capital expenditure and R&D spending are expected to remain between $300- $400 million per quarter throughout 2026 as VinFast continues expanding its global footprint and product portfolio.