VinFast aims to deliver 100,000 cars by 2024

VinFast Electric Vehicle Handover Ceremony

Recently, electric vehicle manufacturer VinFast Auto Ltd. (Nasdaq: VFS), a subsidiary of Vingroup, has updated its unaudited financial report for Q4/2023 and the whole year 2023.

In Q4/2023, VinFast delivered an additional 13.5 thousand electric cars, an increase of nearly 35% compared to the previous quarter, while the number of electric motorcycles decreased by 14% to 24.3 thousand units. The total number of vehicles delivered in 2023 reached over 107 thousand units, including 34.8 thousand electric cars and 72.4 thousand electric motorcycles. The number of electric cars delivered by VinFast in the past year increased by 374% compared to the previous year.

With these results, VinFast recorded over 10 trillion VND in revenue in Q4, equivalent to 437 million USD, an increase of 26% compared to the previous quarter, and a 133% increase compared to the same period in 2022, thanks to an increase in sales volume and a diverse range of products. In 2023, the electric vehicle company achieved over 28 trillion VND in revenue (about 1.2 billion USD), a 91% increase compared to 2022.

VinFast’s Chief Financial Officer, Nguyen Thi Lan Anh, stated that VinFast achieved significant revenue growth and improved profit margins in Q4/2023.

However, after deducting expenses, VinFast had a gross loss of over 4 trillion VND (175 million USD) in Q4 due to the company’s investment in developing the VF6 and VF7 models, building a factory in North Carolina, developing showrooms, and charging stations. However, the gross margin improved from -82% to -40%.

Overall, in 2023, VinFast had a gross loss of over 13 trillion VND (551 million USD), but the gross profit margin improved significantly compared to 2022, from -82% to -46%.

In terms of products, in 2023, VinFast introduced 4 new SUV models in Vietnam in various segments, including the flagship model VF9, VF5, VF6, and VF7. The VF6 model was launched in Vietnam in October.

Currently, VinFast has 13 stores in California and 6 dealerships in 5 states: North Carolina, New York, Texas, Florida, and Kansas, with 75 registered dealers in its network. VinFast plans to have about 130 sales points in North America and 400 sales points worldwide by the end of 2024. Sales through dealers are expected to contribute significantly to the company’s sales in the second half of 2024.

Speaking about 2023, VinFast’s Chairwoman, Le Thi Thu Thuy, described it as a successful year with many milestones, culminating in the company’s listing on the US stock exchange. In addition, the company also introduced new products, expanded its distribution network, solidified its position in existing markets, and explored opportunities in potential markets.

Targeting the delivery of 100,000 vehicles in 2024

VinFast aims to deliver 100,000 vehicles in 2024 through an expanding distribution network and a focus on balancing revenue growth and cost optimization. This will be based on the optimization of manufacturing and material costs, as well as strategic investments in potential markets in the region.

To boost electric vehicle sales, VinFast will expand its distribution channels by leveraging the network and experience of dealerships in each market.

Success in key markets such as the United States will strengthen the company’s competitive advantage in other markets and increase sales volume, especially in untapped and high-potential Asian markets.

At the Indonesia International Motor Show (IIMS), VinFast announced its entry into the Indonesian market with a reverse left-hand drive electric car ecosystem, including the VF5, VF e34, VF6, and VF7 models. The design of the models and the option to rent batteries has received positive feedback.

The company has also officially signed a Memorandum of Understanding with the first 5 dealerships in Indonesia and plans to establish a Completely Knocked Down (CKD) production facility in the country. In the latest development, immediately after signing the Memorandum of Understanding with 5 Indonesian dealers, the Vietnamese automaker has officially signed a letter of intent to supply 600 electric vehicles to 3 Indonesian companies.

In India, over a month after announcing the signing of a Memorandum of Understanding with the Government of Tamil Nadu, VinFast announced the groundbreaking ceremony for an integrated electric vehicle production project in the city of Thoothukudi in Tamil Nadu, with a capacity of up to 150,000 electric vehicles per year when fully operational.

VinFast’s second goal in 2024 is cost optimization. The company is implementing initiatives to reduce material costs by 40% within two years of each model’s launch.

After establishing a foundation in markets such as the United States, Canada, and some European countries, VinFast’s global expansion plan this year will focus on other global markets, including prospective markets close to Vietnam such as Indonesia and India. This step aligns with the capital cost optimization strategy, including goals to optimize production and material costs.

Sharing about 2024, Lan Anh said the company will continue to focus on improving investment efficiency and strengthening the balance sheet through ongoing optimization of production costs, Bill of Materials (BOM) costs, and capital expenditure (Capex) globally. This will be an important support for VinFast in expanding the market, especially in potential markets such as Indonesia and India.

Tu Kinh