VinFast Auto Ltd. Q4 FY2024 earnings call

• 2024 was a year of achievements with delivery exceeding target, market leadership in Vietnam, international expansion (non-Vietnam sales up 10x YoY to 10% of total deliveries), and progress towards profitability.
• Green mobility ecosystem initiatives like free charging program in Vietnam and GSM/VGreen launches in new markets.
• Manufacturing: Three new CKD plants in Asia expected in 2025, second Vietnam manufacturing facility broke ground in Dec 2024.
• Financials: Q4 2024 gross margin impacted by free charging program accounting charge, but excluding that, Q4 gross profit margin was flat QoQ. Full-year gross loss margin improved to -32% from -40% in 2023. SG&A and R&D expenses discussed, cash burn improved in 2024.

In Q4 2024, revenue was $678 million, up 34% QoQ and 70% YoY. Full-year revenue was $1.8 billion, up 58% YoY. Deliveries in Q4 2024 were 53,139 electric vehicles globally, a 43% QoQ and 342% YoY increase. Full-year deliveries were 97,399, exceeding the 80,000 target. Non-Vietnam sales grew 10 times YoY, contributing 10% of total deliveries in 2024. Q4 2024 also saw 31,170 e-scooter deliveries, a 65% QoQ and 41% YoY increase.

• Reaffirmed 2025 guidance, expecting to double 2024 volumes. Q1 2025 expected to be slowest quarter, with Q2 uptick as new green models start delivering, and bulk of deliveries in second half. Other markets expected to contribute over 10% of deliveries in 2025, similar to 2024.
• Focus on scaling volume through new product launches and deepening market presence in Asia, with BOM optimization and manufacturing efficiency to drive margin improvement.

• Regulatory and geopolitical landscape uncertainties.
• Macroeconomic conditions impacting sales and margins.
• NHTSA investigation, with VinFast cooperating but noting NHTSA typically doesn't close investigations without continued cooperation.

Q: What gives confidence in 2025 guidance despite macro conditions?

A: Q1 2025 expected slowest, Q2 uptick with new green models, second half strong, other markets to contribute.

Q: Path to positive gross margins?

A: Focus on scaling volume, BOM optimization, manufacturing efficiency, and strategic capital deployment.

Q: Accounting treatment of free charging program?

A: One-time charge of $242 million recognized in Q4 2024 for free charging expenses on EVs sold by 12/31/2024, with future costs recognized in line with vehicle sales duration.

Q: Capital spending for 2025?

A: Expected cash burn around $2.5 billion in 2025, with $1.8 billion for CapEx and R&D, cash burn from operation around $800-900 million.

Q: Share of VF3 and VF5 in 2025?

A: Expected to be less than 50%, less than Q4 2024, with green series accounting for nearly a quarter of deliveries.

Q: Reaction to shifting focus from US, Canada, Europe sales?

A: Dealers remain strategic partners, transitioning to dealership model for efficiency, with positive sentiment in Asian markets.

Q: Status of US manufacturing plant?

A: Plan to have North Carolina facility by 2028 remains, with focus on dealer performance and pipeline.

Q: Expansion in Indonesia and Philippines?

A: Indonesia has delivered VF3, VF5, VFE34, 22 showrooms, on track for 80 showrooms by end of 2025. Philippines has 6 showrooms, 5 models, aiming for 50 showrooms by end of 2025, VGreen charging stations present.

Q: Impact of US tariffs?

A: Closely monitoring, 2025 guidance accounted for uncertainties, majority growth expected from non-US markets, no significant government support expected in Vietnam.

Q: Rationale for discontinuing battery leasing?

A: Battery leasing helped early EV adoption but dropped to below 30% of sales, so discontinued, with free charging benefits extended.

Q: 2025 priorities and alignment with go-to-market strategy?

A: Priorities include solidifying Vietnam leadership, enhancing CapEx manufacturing, driving product innovation, aligned with product, capacity, and market reach pillars.