VinFast Auto Ltd. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Vietnam Market: Remains a pillar of strength with 172% year-over-year delivery growth and 92% year-over-year revenue growth. On track to double 2024 deliveries. 3 of the 5 best-selling models in Vietnam's first half of 2025 were VinFast EVs.
• International Expansion: Focused on products, markets, and manufacturing. Inaugurated 2 new factories in Vietnam and India. Making progress in doubling design capacity and investing in R&D for next-generation vehicle platform.
• Manufacturing and R&D: In June 2025, inaugurated a second factory in Vietnam's Ha Tinh, with an initial design capacity of up to 200,000 compact EVs. CKD manufacturing facility in India inaugurated in August 2025. Limo Green MPV delivered to customers in early August 2025.
• Strategic Spin-off: Transferred completed R&D assets to Novatech, with the founder agreeing to acquire for $1.6 billion in cash, expected to close in Q3 2025.
• Market Updates:
  • India: Opened pre-booking for VF 6 and VF 7 in mid-July 2025, inaugurated CKD manufacturing facility in Tamil Nadu in August 2025.
  • Southeast Asia: Deepening presence in Indonesia and Philippines. VF 3 awarded Best EV City Car in Indonesia; VinFast in the Philippines captured an estimated 25% market share in the battery electric vehicle segment in the first half of 2025.
  • NA/EU: Rightsizing operational footprint with dealer-led distribution; e-bus debut at Busworld Brussels in October 2025.

Segment Performance

• EVs: In Q2 2025, VinFast delivered 35,837 units, a 172% year-over-year increase. Over the first half of 2025, total deliveries were 72,167 units, up 223% year-over-year. VF 3 and VF 5 were the top-selling models, contributing 61% of total deliveries, while VF 6 accounted for 12% and Green Series SUVs 15%. B2C deliveries have made up over 70% of total deliveries for 4 consecutive quarters through Q2 2025.
• E-scooters: Q2 2025 deliveries were 69,580 units, a 55% quarter-over-quarter increase and 432% year-over-year increase. For the first half of 2025, total deliveries were 114,484 units, up 447% year-over-year.

Guidance

• Reaffirmed 2025 delivery target to more than double 2024 sales. Second half growth expected to be supported by continued robust demand in Vietnam, stronger international dealer and aftersales network, rollout of charging infrastructure, new model launches (VF 6, VF 7), and growing fleet sales to GSM and other transport operators.

Risks

• Macroeconomic headwinds and evolving regulations introducing uncertainties in some markets.
• Intensifying competition in the EV space.

Question and Answer

Q: Andres Sheppard-Slinger: Madam Thuy, just curious if you can maybe give us a little more color on the cost discipline efforts that you're putting in place. I noticed that margin came a little bit below the previous quarters for this time. How should we think about that cost discipline for the second half of the year and into next year, particularly, how should we think about gross margins and blended ASPs for the second half and into next year?

A: Thuy Thu Le: Over the past few quarters, we delivered meaningful BOM cost savings, 16% reduction in Q4 2024 and 11% in Q1 2025. Q2 2025 mix was concentrated on models like VF 3, VF 5, and VF e34 with realized optimization. Further savings limited until new platform. Upcoming versions of VF 6 and VF 7 on new platform will benefit from optimized design, in-house battery production, and supplier collaboration. Cost efficiency driven by technology innovation, supplier partnerships, etc.

Q: Andres Sheppard-Slinger: Got it. Okay. That's super helpful. And just as a maybe a quick follow-up. So you've reaffirmed your outlook to more than double sales this year versus last year, which is great to see. Just curious if you can maybe help us understand where is the second half growth going to be coming from primarily? Is it continued penetration in Vietnam? Or is it India, Indonesia, Philippines? How should we think about that growth for the second half?

A: Thuy Thu Le: Confident in hitting 200,000 unit delivery target. Historically first half is less than 30% of annual volume. Second half growth supported by robust demand in Vietnam, stronger international dealer and aftersales network, rollout of charging infrastructure, new model launches (VF 6, VF 7), and growing fleet sales to GSM and other transport operators, plus expansion of Green Series models like Limo Green, Minio Green, and EC Vans Q: Amandae Baey: Can you elaborate on the impact of next-generation platforms on margin improvement and help quantify the contribution?

A: Anh Thi Nguyen: In August 2025, delivered first Limo Green on next-generation vehicle platform. Next-generation platforms expected to drive meaningful cost savings. Also drive improvement in customer experience with OTA update time cut to less than 1 hour. New vehicles like Minio Greens and EC Vans in pilot to hit market in coming months Q: Amandae Baey: Please give more color on the impact on gross margins in Q2, specifically on the higher warranty provision rates and the increase in the cost of vehicles sold for which revenue has been deferred.

A: Anh Thi Nguyen: Q2 gross margin was negative 41% compared to negative 35% in Q1. Excluding sales reduction related to free charging, NRV at cost of vehicles sold with deferred revenue, and other provisions, gross margin was minus 20.9% in Q2 2025 compared to minus 19.3% in Q1 2025. Higher warranty provision in early years of first production generation expected to trend down. Timing difference in accounting treatment rather than economic loss Q: Amandae Baey: Can you share your plans for the e-bus business? And should we expect the overseas e-bus business to be a meaningful driver for VinFast?

A: Thuy Thu Le: Plan to expand e-bus presence into Asia and Europe. Hired new person to head e-bus business in North America. Debuting 2 e-bus models for European markets at Busworld Brussels in October 2025. Overseas e-bus strategy in early stage, no specific targets disclosed yet, mostly starting the business in 2025 Q: Amandae Baey: What percentage did this segment contribute to first half 2025 revenue and gross loss? How many units do you target to deliver in FY 2025? And what is the current production capacity and expansion plans for the e-scooter business?

A: Anh Thi Nguyen: Contribution of e-scooter segment to first half 2025 revenue is a small percentage, to be disclosed in full financial statement on Form 6-K. No guidance provided for e-scooter FY 2025, but expect substantial increase in deliveries for rest of 2025 due to strong sales momentum year-to-date and favorable government policies Q: Amandae Baey: What is the expected time line to launch the VF 6 and VF 7 in North America?

A: Thuy Thu Le: In the middle of preparing 5-year plan for North America. Things still moving, VF 7 part of plan, but timeline for launch in North America to be addressed likely at end of 2025 Q: Amandae Baey: This quarter, 2-wheeler deliveries far exceeded EV growth. Does the company plan a structural shift in this business model? Or do you still expect 4-wheelers to dominate long-term revenue?

A: Thuy Thu Le: E-scooter average selling price lower than EVs. Strong pickup in Vietnam e-scooter market due to market dynamics, regulatory shifts, and high motorbike sales in Vietnam. Still believe 4-wheelers will remain longer-term revenue drivers, but e-scooter and electric buses will add to revenues going forward Q: Amandae Baey: The next question is regarding the warranty margin drag, which impacted Q2. And should we expect this to be a headwind in the back half of 2025?

A: Anh Thi Nguyen: Q2 margin impact common with first product generations. With ongoing design upgrades, manufacturing process improvements, and stronger aftersales support, warranty costs expected to trend down over time and normalize closer to industry levels. Not seen as sustained headwind in back half of 2025 Q: Amandae Baey: Of total deliveries in the foreign markets, what proportion was to related parties?

A: Anh Thi Nguyen: Across first half of 2025, B2C deliveries accounted for over 70% of total deliveries for 4 consecutive quarters through Q2 2025 Q: Amandae Baey: Please provide an update on our factories in India and Indonesia.

A: Thuy Thu Le: In Vietnam, opened Ha Tinh factory in end of June 2025 with capacity up to 200,000 compact EVs. In India, opened CKD manufacturing facility in Tamil Nadu in early August 2025 with initial capacity 50,000 units per year scalable to 250,000 units per year. In Indonesia, Subang factory construction progressing well, target to open by end of 2025 Q: Amandae Baey: How is that rollout progressing internationally?

A: Thuy Thu Le: In Indonesia, GSM scaled quickly with 3,000 cars on road, 95% utilization rate, partnership with Gojek. V-GREEN targeting 63,000 charging portals in Indonesia by end of 2025. In Philippines, GSM first fully foreign-owned taxi operator with 500 taxis in Metro Manila, 2 depots, 100 charging stations. V-GREEN targeting 15,000 charging points in Philippines by end of 2027. In India, V-GREEN established, GSM exploring entry Q: Amandae Baey: How has the feedback been from consumers around the company's buyback program on returned vehicles? And how do you expect that to change in the medium term?

A: Thuy Thu Le: Buyback program helped build consumer confidence in EV adoption. Given strong value proposition of vehicles, expect customer reason to exercise it to diminish over time Q: Amandae Baey: Why has VinFast initially launched the VF 6 and VF 7 in India while choosing VF 5 and VF e34 for the Indonesia market? Please give more colors on the key differences for these 2 markets.

A: Thuy Thu Le: Holding exciting announcement about India, to be made in next few days. Approach in Indonesia similar to Vietnam due to socioeconomic similarity Q: Amandae Baey: Certain product lines, which have already reached normalized gross margins? And how should we think about the BOM cost trends going forward? Will scaling volumes be sufficient to offset pressures from the higher-end products?

A: Anh Thi Nguyen: Excluding NRV provisions, exceptional items, and noncash items, VF 3 and VF 5 models are already gross margin positive. For high spec models like VF 6 and VF 7, focus on improving margins through platform simplification, supplier resourcing, and localization. Expect sequential improvements with volume scale, and normalized gross margin turning positive at scale and full localization Q: Amandae Baey: VinFast has announced new measures to accelerate e-scooter adoption, such as offering free charging and working with financing partners. How should we think about the financial impact of these initiatives?

A: Anh Thi Nguyen: E-scooter business still loss-making, expected to continue in near term as adoption support measures rolled out. For example, cooperation with 12 major banks in Hanoi offering 10% discount, 10% upfront, free charging until May 2027. Profitability long-term goal, focus on making electric 2-wheelers accessible and aligning with green mobility agenda Q: Amandae Baey: The decision to reintroduce battery leasing in Indonesia. How does bringing back battery leasing impact the company's pricing in Indonesia?

A: Thuy Thu Le: Battery leasing allowed faster EV adoption in Vietnam with lower upfront and monthly payments. 95% of customers chose it initially. Phased out as customers became more familiar with EVs. Reintroducing in Indonesia to build broader customer base, accelerate EV adoption, and strengthen foothold in one of Asia's fastest-growing EV markets Q: Amandae Baey: Competitive intensity in our core Asian markets? And how long do we anticipate running promotional campaigns? And are these promotional campaigns in response to competition in the region?

A: Thuy Thu Le: Competition is strong across Asia due to accelerating EV adoption. Promotions are deliberate strategy to build awareness and accelerate adoption in early market entry stages. Differentiation beyond pricing through building full ecosystem, expanding charging infrastructure, and growing GSM ride-hailing fleet. Promotions expected to normalize as scale and ecosystem mature Q: Amandae Baey: How international sales is tracking?

A: Thuy Thu Le: In first half of 2025, international markets made up less than 10% of total deliveries, similar to 2024. Mix shifted with Indonesia and Philippines as main contributors now. Philippines captured 25% share of BEV segment in first half. Indonesia contributed ~5% of EV deliveries in Q2 2025. Sales in India set to begin in Q3 2025. Key priorities: rolling out Green mobility ecosystem, making EVs accessible through expanded offerings and financing partnerships, working with governments to push green transition Q: Amandae Baey: What drove the higher cash balance this quarter and what is the outlook for cash burn through 2026 and 2027?

A: Anh Thi Nguyen: High cash balance reflects financing inflows of ~USD 1.2 billion offsetting operating and investing outflows. Key driver new term loan agreement with Dutch Bank AG and SeaTown Holdings in end of first half 2025. Expect operating outflows of USD 400 million to USD 600 million per quarter in near term tied to overseas plant operations, R&D, and global operating costs. Over time, expect improvement as operating leverage builds and margin strengthens. Liquidity as of June 30, 2025, stood at USD 4.2 billion, including cash and cash equivalents and expected cash proceeds from R&D assets spin-off. Well supported by project financing from Indonesia and India plants, assisting bank loans, providing ample runway to execute growth strategy through 2026 and 2027