EV maker VinFast's Q1 loss widens on higher spending as deliveries rise
By Phuong Nguyen and Akash Sriram
(Reuters) -Vietnamese electric vehicle maker VinFast reported on Monday its sixth consecutive quarterly net loss as it continues to ramp up spending to boost sales volumes.
VinFast reported a net loss of $712.4 million for the first quarter, less than the $1.3 billion loss in the previous quarter but 20% more than a year earlier. Analysts' average forecast was for a $616.3 million loss, according to LSEG data.
Revenue jumped 150% to $656.5 million in January-March, compared with analysts' average estimate of $520 million.
Deliveries leapt nearly 300% to 36,330 vehicles in the quarter, mainly driven by sales in Vietnam, its biggest market.
VinFast shares were up 10.53% in pre-market trade.
Backed by Vietnam's largest conglomerate, Vingroup, VinFast continues to face challenges due to weak consumer demand, stiff competition, and a 25% tariff the U.S. has imposed on imported vehicles. VinFast previously identified the U.S. as a key growth market.
The company reported a gross margin of minus 35.2% in the quarter, compared with minus 58.7% a year earlier.
The firm is intensifying promotional efforts domestically, shifting to a dealership model from the costlier option of its own showrooms, and redirecting its focus to Asia, with its new assembly plant in India set to begin operations in July.
Research and development expenses fell 22.3% year on year in the quarter, while the cost of sales more than doubled over the same period, it said.
VinFast, which has reported a loss every quarter since it went public in August 2023, has received around $2 billion in financial support from its founder and CEO Pham Nhat Vuong and Vingroup, as of May.
ELECTRIC BUSES
VinFast's affordable, small VF 3 and VF 5 models were its best-selling vehicles, accounting for 68% of its domestic deliveries, chair Thuy Le said on an earnings call.
The company is also looking to expand in the bus market.
"We are exploring opportunities in Asia and Europe with plans to offer electric buses in 6, 8, 10, and 12 meter sizes," Le said.
"We set up in Indonesia and Europe already and very soon in the Middle East and the U.S.," Le said, noting that VinFast already delivered buses in big volumes in Vietnam.
The company said it would introduce its next-generation platform and an electrical architecture with the Limo Green model in the third quarter. This will underpin existing EV models next year.
"While its VF3 subcompact SUV is driving volumes, the company is still losing money on every car it sells," research firm Third Bridge noted in a pre-earnings report.
"The bill of materials is estimated to be significantly higher than those of Tesla and BYD, partly because VinFast lacks scale and still pays a premium to suppliers who are wary of its short track record," it said.
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