VinFast Reports Unaudited Fourth Quarter and Full Year 2023 Financial Results

Singapore, February 22, 2024 - VinFast Auto Ltd. (“VinFast” or the “Company”) (Nasdaq: VFS), a subsidiary of Vingroup JSC, and Vietnam’s leading electric automotive manufacturer, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023. 

• Fourth quarter revenue of $437 million, an increase of 26% over the previous quarter and 133% year-over-year.  Profit margins increased significantly driven by cost optimization. 

• Full year revenue of $1,198 million, an increase of 91% year-over-year.

• Targeting approximately 400 points of sales globally by the end of 2024.

• Strengthening ability to compete effectively in other markets to build scale, especially the untapped, volume-driven markets closer to home like Indonesia and India. 

• Company sets target of delivering 100,000 vehicles in FY 2024. 

• Cost reduction programs expected to further improve margins.

 

Madam Thuy Le, Chairwoman of the Board of Directors, said: "2023 was a whirlwind of firsts for VinFast, culminating in a strong public debut. We launched exciting new products, expanded our distribution network, and solidified our presence in existing markets while opening doors to promising new ones. These moves laid a strong foundation for 2024, a year of global expansion and cost optimization. We're already seeing positive signs in key markets like the U.S. and Indonesia. We're not resting on our laurels. Fueled by this momentum and a recovering consumer sentiment, we're setting an ambitious target of delivering 100,000 vehicles in 2024. This is a testament to our unwavering commitment to building a greener future for all".

Ms Anh Nguyen, Chief Financial Officer, stated: “We saw favorable results in our business operations in the fourth quarter, with strong revenue growth and improved profit margins. We remain focused on enhancing investment performance and strengthening our balance sheet by reducing production and materials costs and strategically optimizing our global manufacturing CapEx. These initiatives will support our expansion efforts into high-growth markets like Indonesia and India and unlock the potential of these regions to drive substantial sales growth.”

Strong Revenue Growth and Gross Profit Improvement from Prior Year 

VinFast delivered a total of 34,855 electric vehicles in FY 2023, marking a 374% increase compared to the previous year. This included 13,513 electric vehicles in the fourth quarter, up 35% from the third quarter of 2023. 

Despite a slight decrease in the fourth quarter of 2023 compared to the third quarter, e-scooter deliveries also saw significant growth, rising 48% year-over-year for a total of 72,468 units in 2023.

VinFast's revenues reached $437 million in the fourth quarter of 2023, a 26% increase from the previous quarter and a 133% increase year-over-year. This growth was driven by both higher sales volumes and an improved product mix.

Total revenues reached $1,198 million in FY 2023, representing an increase of 91% from 2022. 

Gross loss was $174.9 million in the fourth quarter of 2023, and was $551.6 million in FY 2023.

VinFast’s gross profit margin showed significant improvement compared to the previous fiscal year. Gross margin was negative (46%) in FY 2023, compared to negative (82%) in FY 2022. In the fourth quarter of 2023, gross margin reached negative (40.1%), compared to negative (82.6%) in the fourth quarter of 2022. 

 

As part of its previously announced guidance, VinFast invested $213 million in capital expenditures during the fourth quarter of 2023, primarily on the development of its VF 6 and VF 7 models, its North Carolina manufacturing plant and on developing showrooms and charging stations.

Expanding Commercial Footprint and Product Offerings, Creating a Foundation for Future Growth

In FY 2023, VinFast accelerated its expansion efforts with a multi-pronged strategy to scale its commercial footprint, product offerings and manufacturing capabilities, setting the foundation for growth in 2024 and beyond.

In terms of product launches, VinFast introduced four new SUV models in Vietnam across a number of segments, including the flagship VF 9 model, VF 5, VF 6 and the VF 7. In particular, the VF 6, which launched in Vietnam in October, recorded initial sales far above the Company’s expectations. 

In the fourth quarter of 2023, VinFast made an important pivot from the capital-heavy, direct-to-consumer distribution model to a capital-light hybrid model with a strong focus on leveraging existing distribution infrastructure by building a dealership network in the U.S. and globally. 

VinFast now has 13 stores and service centers in California and 6 new dealers in 5 states - New York, Texas, Kansas, Florida and North Carolina, and has had an additional 75 dealers under application.

The Company expects to reach approximately 130 points of sales in North American and 400 globally by the end of 2024, with sales through dealerships contributing a meaningful portion in the second half of the year. 

2024 Focus: More VinFast EVs on the Road and Cost Reduction

In FY 2024, VinFast aims to balance revenue growth with cost optimization, building on its success in optimizing production and materials costs, and investing strategically in promising markets closer to home. 

To put more VinFast vehicles on the road, VinFast will broaden the distribution channels through leveraging the local network and expertise of 3rd party dealerships and distributors.

Building awareness and success in high-profile markets like the U.S. strengthens the Company’s ability to compete effectively in other markets to build scale, especially the untapped, volume-driven Asia markets.

Earlier this month at the Indonesia International Motor Show (IIMS), VinFast announced its entry into the Indonesian market with the right-hand-drive VF 5, VF e34, VF 6, and VF 7 models. The look and feel of the cars, as well as the unique battery leasing option, received positive feedback.

The Company has not released pricing yet but already received an overwhelming number of deposits for its vehicles and thousands of leads of interest. VinFast also signed MoUs with three businesses at IIMS, solidifying its expansion in Indonesia and securing the delivery of a total of 600 electric vehicles.

In India, VinFast aims to seize the growth opportunities and market potential of the world’s most populous nation. Just over a month after the signing of a Memorandum of Understanding (MoU) with the Government of Tamil Nadu, India, VinFast has announced the groundbreaking ceremony for the Integrated Electric Vehicle Manufacturing Facility in Thoothukudi City. With a vision to become a leading regional electric vehicle manufacturing hub, the plant has a capacity of up to 150,000 electric vehicles per year when it officially goes into operation.

VinFast's battery leasing policy has the potential to drive sales significantly in new markets. This mechanism brings the upfront price of VinFast vehicles and the monthly running cost down in line with or even more competitive than many gas-powered vehicles on the market today. 

Cost optimization is the second key goal for the year. VinFast is pursuing initiatives to reduce material costs by 40% within two years of each model launch; half through engineering efforts such as part redesign and platform optimization, and the other half through sourcing and purchasing initiatives including in-sourcing and supplier shifts.  In addition, VinFast will continue optimizing production and other costs.

VinFast targets delivery of 100,000 vehicles in FY 2024, leveraging a larger distribution network and supported by resilient and potentially recovering macroeconomic conditions. 

Encouraging signs are emerging for VinFast in early 2024, particularly in California, where the Company’s direct-to-consumer approach has fueled a significant order jump in January and February, marking a strong start in the critical U.S. market.

After laying a solid foundation in markets such as the US, Canada, and several European countries, VinFast's global expansion strategy for 2024 focuses on penetrating other global markets including markets closer to home like Indonesia and India. This aligns with its CapEx optimization strategy, along with targets for production and BOM costs.

Conference Call

The Company's management will host its fourth quarter and full year 2023 earnings conference call at 8:00 AM U.S. Eastern Time on February 22, 2024.

Live Webcast: https://edge.media-server.com/mmc/p/97n5zeka/

Q&A Participation: https://register.vevent.com/register/BIffc51cc3f8a04a119934deb5bc4af497

For additional information, please visit ir.vinfastauto.us.

Investor Relations    Email: [email protected]

Media Relations       Email: [email protected]

About VinFast 

VinFast - a subsidiary of Vingroup JSC - is Vietnam’s leading automotive manufacturer committed to its mission of creating a green future for everyone. VinFast manufactures a portfolio of electric SUVs, e-scooters and e-buses in Vietnam and exports to the United States, and soon, Europe. Learn more at www.vinfastauto.us.

***

VinFast deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the average selling price and various cost components. 

Forward-Looking Statements

Forward-looking statements in this announcement, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1955. These statements include statements regarding our future results of operations and financial position, planned products and services, business strategy and plans, objectives of management for future operations of VinFast, market size and growth opportunities, competitive position and technological and market trends and involve known and unknown risks that are difficult to predict. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal,” “objective,” “seeks,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (i) the effect of the consummation of the business combination and the public listing of the Company’s securities on its business relationships, performance, financial condition and business generally, (ii) the risk that the Company’s securities may experience a material price decline and volatility in the price of such securities due to a variety of factors, (iii) the adverse impact of any legal proceedings and regulatory inquiries and investigations on the Company’s business, (iv) the Company’s potential inability to maintain the listing of its securities on Nasdaq, (v) the risk associated with the Company’s limited operating history, (vi) the ability of the Company to achieve profitability, positive cash flows from operating activities and a net working capital surplus, (vii) the ability of the Company to fund its capital requirements through additional debt and equity financing under commercially reasonable terms and the risk of shareholding dilution as a result of additional capital raising, if applicable, (viii) risks associated with being a new entrant in the EV industry, (ix) the risks of the Company’s brand, reputation, public credibility and consumer confidence in its business being harmed by negative publicity, (x) the Company’s ability to successfully introduce and market new products and services, (xi) competition in the automotive industry, (xii) the Company’s ability to adequately control the costs associated with its operations, (xiii) the ability of the Company to obtain components and raw materials according to schedule at acceptable prices, quality and volumes acceptable from its suppliers, (xiv) the Company’s ability to maintain relationships with existing suppliers who are critical and necessary to the output and production of its vehicles and to create relationships with new suppliers, (xv) the Company’s ability to establish manufacturing facilities outside of Vietnam and expand capacity in a timely manner and within budget, (xvi) the risk that the Company’s actual vehicle sales and revenue could differ materially from expected levels based on the number of reservations received, (xvii) the demand for, and consumers’ willingness to adopt, EVs, (xiii) the availability and accessibility of EV charging stations or related infrastructure, (xix) the unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for EV manufacturers and buyers, (xx) failure to maintain an effective system of internal control over financial reporting and to accurately and timely report the Company’s financial condition, results of operations or cash flows, (xxi) battery pack failures in the Company or its competitor’s EVs, (xxii) failure of the Company’s business partners to deliver their services, (xxiii) errors, bugs, vulnerabilities, design defects or other issues related to technology used or involved in the Company’s EVs or operations, (xxiv) the risk that the Company’s research and development efforts may not yield expected results, (xxv) risks associated with autonomous driving technologies, (xxvi) product recalls that the Company may be required to make, (xxvii) the ability of the Company’s controlling shareholder to control and exert significant influence on the Company, (xxiii) the Company’s reliance on financial and other support from Vingroup and its affiliates and the close association between the Company and Vingroup and its affiliates, (xxix) conflicts of interests with or any events impacting the reputation of Vingroup affiliates or unfavorable market conditions or adverse business operations of Vingroup and Vingroup affiliates and (xxx) other risks discussed in our reports filed or furnished to the Securities and Exchange Commission.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. You are cautioned not to place undue reliance on any forward-looking statements, which are made only as of the date of this announcement. VinFast does not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If VinFast updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. The inclusion of any statement in this announcement does not constitute an admission by VinFast or any other person that the events or circumstances described in such statement are material. Undue reliance should not be placed upon the forward-looking statements.