Vietnamese EV maker VinFast reports massive quarterly loss

VinFast, the Vietnamese electric vehicle manufacturer, has reported significant financial results for the second quarter of this year. The company disclosed a substantial net loss of 18.76 trillion dong, which represents an increase from the 13.4 trillion dong loss recorded in the same period last year. Despite this increase in losses, VinFast's revenue showed positive growth, rising by 9 per cent to reach 8.67 trillion dong.

In terms of vehicle deliveries, VinFast demonstrated strong performance. The company delivered 13,172 electric vehicles during the second quarter, marking a 43 per cent increase compared to the previous year. When considering the first half of the year as a whole, VinFast's vehicle deliveries totaled 22,348 cars, representing an impressive 101 per cent growth rate.

Addressing the financial results, VinFast's Chairwoman, Le Thi Thu Thuy, provided context for the company's current position. She emphasized that VinFast is still in its startup phase and anticipates continued losses in the upcoming quarters. Thuy attributed the second quarter's loss primarily to an impairment charge on net residual value. To provide further clarity, VinFast issued an emailed statement explaining that this impairment charge amounted to USD 101 million in the second quarter, a significant increase from the $5 million recorded in the previous quarter.

VinFast has ambitious plans for global expansion, aiming to establish itself as a recognized international brand. The company intends to sell its vehicles in up to 50 overseas markets. This strategy comes at a time when the global electric vehicle industry is experiencing a slowdown, prompting many major automotive companies to reassess and scale back their electric vehicle initiatives.

The total electric vehicles delivered by VinFast in the second quarter, 51 per cent were to parties related to the company, as disclosed in their filing.

The company's billionaire founder and CEO, Pham Nhat Vuong, demonstrated his confidence in VinFast's future during a June interview with Bloomberg TV. Vuong expressed his willingness to invest all of his personal wealth into the company's growth, underlining his commitment to its success.

VinFast is also actively expanding its manufacturing capabilities internationally. The company has plans to open a factory in India within the first half of next year and has already begun construction on an assembly plant in Indonesia, breaking ground in July.

Looking ahead, VinFast anticipates that Vietnam's domestic market will play a crucial role in driving revenue for the remainder of 2024. The company revealed that in the second quarter, the Vietnamese market accounted for over 90 per cent of total deliveries, highlighting its current importance to VinFast's operations.