VinFast Auto Ltd. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Deliveries Performance: Q1 '25 EV deliveries exceeded the first half of last year. 2-wheeler deliveries saw strong growth. B2C deliveries have accounted for over 70% of total sales for 3 consecutive quarters.
• EV Adoption and Market Performance: In Vietnam, VinFast drove EV penetration to nearly 40% in Q1. Made progress in Indonesia with VF 3 launch. In Vietnam, VinFast led the auto market with over 35,100 deliveries in Q1 2025.
• Product Expansion: Introduced Green series, commercial vehicles. Opened CKD factory in India. Closing D2C showrooms in Europe and North America, refocusing to dealer showrooms.
• R&D Roadmap: Next-gen platforms and zonal E/E architecture to drive cost savings. First MPV model Limo Green to launch in Q3 2025.

Segment Performance

• Electric Vehicles: In Q1 2025, VinFast delivered 36,330 electric vehicles, a 296% year-over-year increase but a 32% quarter-over-quarter decline. Net revenue for Q1 2025 was $657 million, up 150% year-over-year. Cost of goods sold was $888 million, up 113% year-over-year but down 25% quarter-over-quarter. Gross margin was -35% in Q1 2025, an improvement from -59% in the same period last year.
• 2-Wheelers: Delivered 44,904 units in Q1 2025, a 473% year-over-year increase and a 44% quarter-over-quarter rise.
• Financials: SG&A expenses for Q1 2025 totaled $151 million, a 43% quarter-over-quarter decline. R&D expenses were $81 million, down 22% year-over-year. Net loss for the quarter was $712 million, an improvement from -226% in Q1 2024.

Guidance

• Deliveries: Target to double deliveries in 2025.
• CapEx: Plan to spend over 50% of 2025 CapEx on R&D for new models and refreshes, remaining on CKD facilities.
• Profitability: Aim for breakeven in gross margin by 2026 through BOM optimization and volume growth.

Risks

• Macro Uncertainties: Global macroeconomic and trade uncertainties impact operations.
• EV Adoption Barriers: Charging infrastructure remains a barrier to EV adoption.
• Operational Transition Risks: Closing D2C showrooms and transitioning to dealer model may involve impairment charges.

Question and Answer

• Q: Timeline on new factories in Vietnam, India, Indonesia and production capacity? A: All facilities expected to start operations in 2025. India factory opens in July, others to follow. New facilities focus on affordable models.
• Q: Catalysts for growth? A: Scaling operations, accelerating product development, cost optimization for profitability.
• Q: CapEx timing and bus market rollout? A: CapEx to peak in Q2/Q3 2025. Started delivering buses in Vietnam, expect to deliver 1,000 in Vietnam this year, expanding to other markets.
• Q: ASP trajectory and margin improvement? A: ASP likely under $20,000 in 2025. Gross margin improving due to BOM optimization and scale, targeting breakeven in 2026.
• Q: Liquidity and profitability? A: Liquidity around $2.4 billion. Certain vehicle models already gross profit positive with sufficient scale.