VinFast Auto Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
April 24, 2025

There are 6 speakers on the call.

Operator

day, and thank you for standing by. Welcome to the BINFAST Auto Limited Q4 twenty twenty four and Full Year Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I will now like to hand the conference over to your speaker today, Ning Kwang. Please go ahead.

Speaker 1

Thank you, operator, and good morning, everyone. This is Ning Nguyen from Finfast Investor Relations. Welcome to our fourth quarter earnings conference call. Joining me today are Chairwoman of the Board, Madame Tui Le and our CFO, Ms. Lang An Muin.

Speaker 1

During the call, we will discuss our fourth quarter performance, business update, and present our outlook for 2025. After management's remarks, we will have thirty minutes for Q and A. And we will also reference a slide deck today which is accessible on the IR website. Before I turn over to Madam Treat, let me remind you that some of the statements on this call include forward looking statements under federal securities law. These include without limitation, statements regarding the future financial and operating outlook, guidance, macroeconomic, industry trends, company initiatives, and other future events.

Speaker 1

These statements are based on the prediction and expectation as of today. Actual event or result may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factor in our most recent filings with the US Securities and Exchange Commission. In addition, management will refer to non GAAP financials during this call. A discussion of why we use non GAAP and information regarding the reconciliation of our non GAAP versus GAAP is available in the press release that we issued this morning.

Speaker 1

You can also find it in our slide deck. And with that, I would like to invite Madam Tui to start with management remarks.

Speaker 2

Thank you, Ni, and hello everyone. Thank you for joining us today. I'm thrilled to discuss Finfast's outstanding Q4 and 2024, which was a year full of achievements that have set FinFas up well for 2025. It was a good year in which we exceeded our delivery target, established our market leadership in Vietnam, expanded to new markets and made progress on our path to profitability. Before I recap the year, I would like to take the opportunity to address the events that are currently reshaping the global trading landscape and will continue to take shape before stabilising.

Speaker 2

Here at Finfast, we remain agile to the changes in regulatory and geopolitical landscape. Our vertically integrated manufacturing capabilities and high localization rate are key competitive advantages of Winfas during this uncertain period. At the same time, we are taking proactive steps to safeguard and sustain sales performance, including strengthening customer and dealer engagement, optimizing go to market strategies and reinforcing brand awareness. We are focused on building greater products, investing in innovation and ensuring that the customers get high quality affordable EVs. We are keeping our 2025 guidance and we continue to evaluate and be flexible as the landscape evolves.

Speaker 2

Let us now look back at 2024. We ended 2024 with a total delivery of 97,399 EVs globally exceeding our 80,000 delivery target. Q4 twenty twenty four saw a steep ramp up in our output where we set a new monthly delivery record for every month in the quarter. Finfast continues to reshape customer behaviour through a diverse vehicle line up, first of its kind green mobility ecosystem and pioneering incentives including a free charging programme in Vietnam. Twenty Twenty Four also saw important progress in our international expansion.

Speaker 2

As non Vietnam sales grew 10 times year over year increasing contribution from 3% to 10% of our total deliveries. We also had our brand debut in new Asian markets and continue to strengthen the VinFast dealer network globally. As of 03/31/2025, VinFast has three twenty two showrooms, of which 89% are dealer stores compared to 123 showrooms as of 12/31/2023 and of which 78% were dealer stores. That is a 160% growth. Our three new CKD plants in Asia are expected to begin operations in 2025.

Speaker 2

They will ensure a holistic alignment between our market expansion and manufacturing capabilities. In addition to our strong top line growth, full year gross margin excluding NRV and one off accounting charges narrowed to -thirty two percent from -forty percent in 2023. Q4 '20 '20 '4 gross loss margin was impacted by an accounting charge we had to book for the VinFast Precharging Programme for all EVs sold in Vietnam up until 12/31/2024. Our CFO, Lan Nang, will touch more on this later. Our balance sheet was also strengthened with the disbursement of grants from our founder and loans from Vingroup.

Speaker 2

More specifically about deliveries during Q4 and recent business highlights. Vingfast had record deliveries in all three months of Q4, bringing total deliveries for the quarter to 53,139 electric vehicles globally, increased by 143% quarter over quarter and 342% year over year. Our B2C sales grew by 140% quarter over quarter and over 20 times year over year. Proportion of EV delivery to non related party customers was 81%, which increased from 78% in Q3 twenty twenty four and eighteen percent in Q4 twenty twenty three. During the quarter, we also delivered 31,170 e scooters which increased by 65% quarter over quarter and 41% year over year.

Speaker 2

In Southeast Asia, we continue to strengthen our presence through foundational work and strategic partnerships with local businesses. Recall that in 2023 and early twenty twenty four, WinFast founder also announced the launch of new separate entities GSM, a dedicated EV taxi and ride hailing service and VGreen, a charging network developer. Together with VinFast, these companies form a vertically integrated green mobility ecosystem which combines electric vehicles, shared mobility services and charging infrastructure tackling the two biggest hurdles when it comes to early EV adoption: unfamiliarity with EV experience and anxiety over charging. Outside of Vietnam, Indonesia marked the debut of our green mobility ecosystem with the launch of GSM in Jakarta Late December Last Year, while V Green also announced their commitment to build one of the largest charging networks in Indonesia to serve Infast car owners. The Philippines, which is the second international market for our green mobility ecosystem has seen VGreen announce MOUs to establish charging stations across key cities and GSM is expected to launch later this year.

Speaker 2

As of 03/31/2025, we had two fifty eight showrooms and dealer stores across Southeast Asia, including 22 in Indonesia and six in The Philippines. Our CKD plant in Indonesia is on track to be operational by end of twenty twenty five. Indonesia and The Philippines represent the key long term growth markets. And with Vietnam as the base for our broader Asia expansion, Our home market provides a strategic anchor that enhances our agility and strengthens our ability to scale successfully in new markets. In 2024, Vietnam served not only as our home market but also as a testbed for VinFa's end to end EV strategy.

Speaker 2

We address key adoption barriers, consumer unfamiliarity, pricing gap and charging access through consistent execution anchored in three core values: quality vehicles, competitive pricing and exceptional after sales service policy. On the product side, 2024 marked the first year where all seven models in our line up were in production and available in Vietnam. VF3 and VF5, our most affordable models, reshaped public perception of EVs from luxury products to practical everyday vehicles. Together, they accounted for 60% of total deliveries, which is remarkable considering we have three only started deliveries from last July. Our green mobility ecosystem has played a crucial role in overcoming consumer scepticism and raised anxiety by offering low risk exposure to EVs before purchase.

Speaker 2

The VSE34, our first EV model, remains integral to our taxi operations and has paved the way for shared mobility adoption. Recognising the importance of shared mobility services in accelerating EV transition, we launched the Green Series, a dedicated line up tailored for transportation use cases. This includes tailored versions of the VFI and VF E304 specifically adapted for transportation purposes as well as two new models: Limogreen, our entry into the MPV segment and MINIO Green, designed to convert even more two wheeler users into four wheeler EV drivers. We observed that this trend is being well adopted by 100 local taxi brands who have started their journey of electrification. To complement our product offering, in late twenty twenty four, BinFast introduced a pioneering free charging program to all customers for over two years until 2027.

Speaker 2

This program was designed to minimise EV cost of ownership, making them even more accessible to a wider population and further driving EV adoption in Vietnam. As a result of our efforts for data from Vietnam registration, VinFast ended 2024 with around 20% total passenger vehicles market share, up from just 2% in 2023, delivering over 87,000 vehicles, up by 171% year over year and driving Vietnam's EV penetration to one of the highest levels in Asia, establishing VinFast as the nation's number one auto brand. Realising that we are entering into a new chapter, we also made an adjustment to our go to market strategy by removing the battery leasing programme. This programme has played a key role in narrowing the affordability gap between EVs and ICE vehicles over the past year. Battery leasing was valuable in early days of EV adoption and has since served its purpose and was discontinued as of 03/31/2025.

Speaker 2

On the manufacturing side, as Southeast Asia's only vertically integrated EV OEM, our close proximity to key suppliers and manufacturing capabilities enables us to keep pace with strong demand. To further enhance efficiency and capacity, we broke ground on a second manufacturing facility in Vietnam Last December, scheduled to begin production in mid-twenty twenty five. The new Huteng CKD plant will support our affordable model and unlock platform level synergies across our global footprint. Let's talk about India. In January, we made our brand debut in India at the Bharat Mobility Global Expo with the launch of the VX6 and VX7.

Speaker 2

We are diligently working to increase our brand awareness and local partnership ahead of the completion of our Tamil Nadu facility. This 400 acre integrated manufacturing facility is on track to begin operations by mid-twenty twenty five and in the commissioning phase with equipment, systems and processes are being tested. We will start this CKD assembly for 50,000 vehicles annually. Moving on to North America and Europe. 20 20 4 was a year of healthy growth of InfraS in North America, with The US and Canada accounting for approximately 42% of our global deliveries respectively.

Speaker 2

The increased sales in The US were driven by the introduction of the dealership distribution model besides our direct to consumer showrooms. Our dealers' local knowledge and connections have greatly helped us with our go to market, allowing us to widen our market reach in a more cost efficient manner. Since late twenty twenty three, we have been transitioning from purely direct to consumer to a hybrid distribution model with heavy focus on dealer showrooms. With the growing acceptance of the VinFlash brand in The US and our strategic initiative to optimise our footprint, we are taking this one step further with a planned closure of our B2C showrooms in California by June 2025. This initiative comes with gradual replacement by dealers showrooms, which is expected to drive greater efficiency in sales and marketing.

Speaker 2

In a similar fashion, WinFast is initiating a plan for a dealer network in Europe. The company has signed an agreement with Autohaus Groups to operate showrooms in Germany and plan to develop a dealer network across major cities in Germany, France and The Netherlands. This approach enables WinFast to optimise operations, reduce risk and leverage local market expertise. As of 03/31/2025, BinFast had 48 showrooms in North America and 14 in Europe. In The US, we have developed a network of 38 dealers.

Speaker 2

Now let me walk you through our three pillar growth strategy: Product Capacity Market which will drive our 2025 target of doubling 2024. First, products. Our mission is simple: to make EV accessible to everyone with multiple brand segments to serve various use cases. Next, capacity. With the new CKD facilities coming on in 2025, we are effectively adding capacity of up to 300,000 vehicles per year to our total design capacity, well mapped with our focused market.

Speaker 2

Finally, market reach. Expansion in Asia will continue to be our top priority for 2025. At the same time, we will continue our strategic expansion of our dealer network in other regions evaluate the local demand environment to determine which new models to introduce. Our 2025 guidance reflects strong confidence in our ability to grow market share in Vietnam and expand internationally, especially in Asia, which remains central to our long term growth strategy. To support this, we have taken proactive steps to localise manufacturing and build strong partnerships with local dealers.

Speaker 2

These efforts help us better navigate different regulatory environments and operate more effectively in diverse markets. Southeast Asia continues to attract attention from global automakers. But one of the things that sets VinFast apart is our ecosystem approach. By integrating services across our green mobility network, we are creating a strong foundation for long term EV adoption and building lasting brand value. With that, I will hand it over to Lanai to discuss our financial results and outlook.

Speaker 2

Thank you Madam T. Despite a challenging macroeconomic backdrop, Vifas concluded 2024 with strong operational momentum, laying a foundation for further growth in 2025. As a young and dynamic EV manufacturer, we need to focus on continued innovation to build better quality and better performance vehicles. At the same time, we are streamlining our operations and managing costs carefully to support our revenue growth and progress towards profitability. To support our Asia growth, we plan to strategically deploy capital into three new CKD plans that are scheduled to begin operation in 2025, further strengthening our production flexibility.

Speaker 2

Now, let me recap our 2024 performance. Revenue for the Q4 twenty twenty four was US678 million dollars up by 34% quarter over quarter and 70% year over year. Full year revenue was US1.8 billion dollars increased by 58% year over year. Cost of goods sold in Q4 twenty twenty four was 1,200,000,000.0 US dollar increased by 93% quarter over quarter as volumes ramped up significantly. Full year cost of goods sold were 2,800,000,000.0 US dollar which increased by 67% versus 2023.

Speaker 2

Q4 '20 '20 '4 gross margin was minus 79% versus minus 24% in Q3. The pressure on this quarter's gross margin was due to an accounting charge that we booked in relation to the free charging program in Vietnam. Mr. Pharm is responsible for paying the cost to implement the program for the EDs sold on or before December thirty first of twenty twenty four. The estimated amount to be paid directly by Mr.

Speaker 2

Farm for the entire first free charging period is approximately US242 million dollars This amount is recognized as a revenue deduction and a deemed contribution to the owner in our financial statements for fiscal year twenty twenty four. Therefore, we need to book an adjustment on revenue corresponding to the charging benefits of own EV sold on or before 12/31/2024. If we remove for the impact of the pre charging program and NAV, Q4 twenty twenty four gross profit margin was flat quarter over quarter and saw an improvement from minus 35% from a year prior to minus 26%. Twenty twenty four gross margin loss was minus 57% compared to the minus 49% in 2023. Again, if we adjust for the impact of the free charging program and NIV, full year gross margin saw an improvement from minus 40% in 2023 to minus 32% in 2024.

Speaker 2

To elaborate on improved efficiency, in Q4 twenty twenty four, we continued to see average unit BOM and production costs for EVs declined by 1643% respectively. For 2024, average unit BOM and production costs for EV declined by 3450% year over year respectively. Some of our high volume models, excluding NRV, depreciation and amortization and free charging expenses are now achieving positive gross profit reflecting the benefits of scale and BOM optimization. Moving to operating expenses. Q4 twenty twenty four SG and A expense was US268 million dollars up by 89% quarter over quarter and by 108% year over year.

Speaker 2

For the full year 2024 SG and A was US694 million dollars up by 50% year over year. The increase in SG and A compared to Q3 is primarily attributable to our efforts to scale our sales operation globally and the impairment charge to battery production lines due to business adjustments. If we exclude the impact of the impairment and some one off items during Q4 twenty twenty four, SG and A as a percentage of revenue declined to 19% from 26% in Q3. For the R and D, Q4 twenty twenty four R and D spend was US110 million dollars up by 28% quarter over quarter and decreased by 15% year over year. For the full year 2024, R and D spend was US412 million dollars decreased by 35% year over year.

Speaker 2

The decrease over the Q4 twenty twenty three was primarily due to the reduction in engineering and development costs as we completed the majority of the product development work in our existing models. The increase over the Q3 twenty twenty four was primarily due to the introduction of the existing model to foreign markets. For EBITDA and bottom line, Q4 twenty twenty four EBITDA loss is minus US928 million dollars The EBITDA losses widened in line with the increased sales volume in Q4 twenty twenty four. Full year 2024 net loss was minus US3.2 billion dollars If we exclude the impact of free charging program, NAV and impairment of assets, net loss margin improved to minus 128% in 2024 from minus 203% in 2023. For Cashman, Q4 twenty twenty four CapEx is US251 million dollars 90 3 percent higher than Q3 due to CapEx on our facilities.

Speaker 2

However, full year CapEx was US686 million dollars which decreased by 32% year over year. Our cash burn significantly improved in 2024, decreased by 39% year over year to US1.9 billion dollars reflecting our discipline in cost and capital management. Among which, cash burn from operating activities was only US1.25 billion dollars compared to US2.1 billion dollars in 2023. When it comes to quality of cash flows management, our cash burn in 2024 is equivalent to 104% of revenue compared to 267% in 2023. As stated earlier, we expect to continue investing in R and D and CapEx in 2025 as we continue to improve customer experience and innovation.

Speaker 2

This would be partially offset by cost savings in other areas. At the same time, we will continue making progress towards profitability by scaling our top line growth and further cost savings. Turn to our liquidity position. Last November, we announced a capital support package from our founder, Mr. Farm and Vin Group through a combination of grants and loans.

Speaker 2

By 12/31/2024, WeHite received approximately US800 million dollars and by 03/31/2025 total disbursements has exceeded US1.5 billion dollars strengthening our balance sheet and runway. In addition to the commitments disbursed from Mr. Farm and VinGroup, VinFast has access to nearly US1 billion dollars of liquidity, including an Alloc facility. As of 03/31/2025, VinFast liquidity position stood at approximately US3 billion dollars This includes a US968 million dollars ELOC facility, around US1.9 billion dollars in funding from our founder and loans from VinGroup. While we continue to be supported by our founder and corporate parent, we are evaluating capital markets opportunities to diversify our funding sources.

Speaker 2

Lastly, an update on the profitability perspective. 2024 marked a meaningful progress in our scaling journey and operational discipline. In 2025, we are focused on scaling volume through new products launched and deepening our market presence in Asia. At the same time, we are executing against clear levels for BOM optimization, manufacturing efficiency and strategic capital deployment to drive margin improvement and move towards full year EBITDA profitability. Operator, let's now open for Q and A.

Operator

Thank

Speaker 2

We

Operator

will now take the first question from the line of Andreas Shepard from Cantor Fitzgerald. Congratulations

Speaker 3

on the quarter. Just a first question is, so you're reaffirming your guidance for 2025 for now. I guess, what gives you confidence in your guidance so far, just given all of the macro conditions? And how should we think about deliveries for '25 in terms of Vietnam versus other markets like India, Indonesia? What kind of breakdown should we be thinking about?

Speaker 3

Thank you.

Speaker 2

Hi, Andrea. How are doing? Thank you for the question. So in terms of the confidence for the guidance, we it's very similar to 2024. We expect that Q1 is going to be the slowest quarter.

Speaker 2

So we announced about 35,000 deliveries in Vietnam in Q1. Then we expect some uptick in Q2 as two of the new green models will start delivering towards the end of the quarter. And then the bulk of the 45,000 greens noncancelable preorders that we we just received, we start hitting in the second half of the year. So, overall, we think that the first half contribution would be approximately 25, 30 percent, and then you will see most of the rest of the deliveries in the second half of the year with q four again being the strongest quarter. So we we see a good result from the orders for the green series in 2025.

Speaker 2

And in the first quarter this year, we already we already exceeded the first half of last year, and we continue building the momentum in in in Vietnam and in in other markets. So, basically, I mean, looking at Vietnam and other market, we have confidence that we should be able to deliver at least double what we did last year. In terms of the break breakdown between Vietnam and other markets, we expect that other markets will contribute more than more than 10%, similarly to last year. Yeah. So yeah.

Speaker 2

Yeah. So Vietnam Indonesia, and we expect Indonesia Asia market, Indonesia, Philippines, and India will contribute quite significantly this year. Thank you.

Speaker 3

Wonderful. Thanks, Madam Dui. That's super helpful and super thorough. Really appreciate it. Just one last question just on gross margins.

Speaker 3

Can you remind us the path to positive gross margins? It seems like most sales for this year will probably be the VS3 and VS5 again. So with lower ASPs, how should we think about the path to positive gross margins? Thank you.

Speaker 2

Pass it over to Laming. Yes. As for the gross profit margin, actually 2024, we marked significant progress in our scale strategic execution and it's an encouragement to our path to profitability. Bidfast also ended the year with strong momentum, having more like a double quarterly revenue year over year. So excluding the NAV and one off accounting charges, we have narrowed our full year gross loss margin to minus 32% from minus 40% in 2023.

Speaker 2

So in 2025, we we are focused on the scaling volume through the new product launches and deepening our market presence in Asia. At the same time that we we are executing against clear levels for home optimization, manufacturing efficiency, and and strategic capital deployment to drive margin improvement and and move towards the full year EBITDA profitability. Yep.

Speaker 3

Perfect. Thank you so much again, and congratulations on the quarter. I'll pass it on.

Operator

Thank you. Thank you. We will now take the next question from the line of Greg Lewis from BTIG LLC. Please go ahead.

Speaker 4

Yeah, hi, thank you, good evening and good afternoon, good morning, everybody. I was hoping to understand a little bit better the accounting treatment or how you're realizing the EV charging credit. It sounds yes, if you could just walk us through like how much we realize at the point of sale and then is that something that since the charging is in place for a couple of years, it's realized over the life of the three year window?

Speaker 2

So for the free charging program, actually during the Q4 twenty twenty four, we had the one time charge was recognized in the Q4 to account for the pre charging expenses for the old EV that we sold on or before the 12/31/2024. So you can see that we recognize US242 million dollars deduction in kind of the deduction in the revenue. Is in line with the US gov accounting treatment that we need to deduct to the revenue. And because mister Pham, our founder, is responsible for this this charging spend, but we increased for the daily contribution from the the shareholder. So that's why you you see the onetime charge, a big amount in the q four twenty twenty four.

Speaker 2

Going forward, it's expected that this call is going be recognized in line with the corresponding vehicle sales for the duration of the free charging program that we are offering to customer. The currently, under the our sales policy, the free charging program is gonna be ended on December 31.

Speaker 4

Okay. Great. And then, when we think about, ASPs and mix, I mean, I guess the focus is going to be on the VF3 and VF5. So, how should we think about the ASPs trending in 2020 for the rest of the year? How are you guys thinking about that on pricing?

Speaker 2

Yes, yes. You are correct that actually with the increasing of the VF3, VF5 heavily in the hour mix in Q4. So ASP is around US16000 dollars per car is the average kind of the average in Q4 that compared to the around 20,700 US dollar in the q three. This electric for the decline of the over 22% in the a ASP. So also the driven primarily by the VF three, VF five.

Speaker 2

And in in overall, in 2024, the ASP is around 19,300 per car. Expect that we see the ASP in in the low range during the early adoption stage, where customer tend to prefer small cars, low price car to explore and experience. However, the ASP is only one part of the equation. The other part is unit growth. So our objective to introduce more affordable models is to capture a possibly underserved cohort of the consumer that's prioritized value in both dollar terms, but also the environment impact.

Speaker 2

So, ultimately, strong unit growth should offset the ASP decline and it lead to sustainable revenue growth.

Speaker 4

Okay. Super helpful. Thank you for taking my questions.

Operator

Thank you. We will now take the next question from the line of James McIlree from Chardan Capital Markets. Please go ahead.

Speaker 5

Yes. Thank you. When we look at capital spending for 2025 and 2026, are the amounts that you've budgeted similar to what you spent in 2024 or significantly higher or lower?

Speaker 2

So you referred to the investment, so we can like enter into our cash burn that's I just like a hefty number that in 2024 we have the cash burn US1.9 billion US dollar, and we expect that in 2025, approximately around 2,500,000,000.0 US dollar. Out of that, we expect to spend 1,800,000,000.0 for the CapEx and IND. And the CapEx is for our CKD facilities across Asia, and that that we are expect to be operational in in 2025. And for the r and d, around most CapEx and and and OpEx is around 700 or 750,000,000 US dollar. So the cash burn from operation is reducing?

Speaker 2

The cash burn for the operation is around 800 to 900,000,000. That's the

Speaker 3

last year.

Speaker 2

Yeah. Slightly reduced versus last year.

Speaker 5

Thank you. And secondly, when we evaluate the share of sales coming from the VF3 and VF5 in 2025, is that going to be approximately similar to what it was in Q4 of twenty twenty four?

Operator

Please standby, your conference will resume shortly.

Speaker 2

I think it's less than 50% because we have the green coming in as well. Yes. than q four last year, James.

Speaker 5

Okay. I I hate to do this to you, but the the conference blanked out for during your answer. So if you can just

Speaker 1

Oh, the summarize your answer.

Speaker 5

Sorry about that.

Speaker 2

The percentage of VF three and VF five this year is expected to be less than 50% and let which is less than q four last year. But we also we're adding we're adding the green series this year, so that would account for almost a quarter of the deliveries for this year as well.

Speaker 5

Very good. Thank you so much.

Speaker 2

Thank you. Thank you.

Operator

There are no further questions at the phone at this time. I would like to hand over for any webcast questions now.

Speaker 1

Thank you, operator, and thank you, Madam T. Leung Hwan. We have the first question from the webcast. With the target to at least double volumes in 2025, what percentage do you expect international markets to contribute? I think this we have already addressed this, so let's move on to the next one.

Speaker 1

With the recent announcement of shifting focus and not boosting US, Canada, Europe sales, what does that mean to the current owners, dealerships, and service centers? What is the update on the routine NHTSA investigation?

Speaker 2

Okay. Let me take it. So the first question is about the reactions to The US, Canada, and Europe sales. So our dealers in the market remain strategic partners and continue to play a vital role in our growth and market execution. So across all the markets, we are transitioning to a dealership model to enhance the efficiency and scale.

Speaker 2

This shift enables cost optimization for us while expanding our reach faster, particularly in a high potential region where demand pipeline remains strong. Why the recent headlines have prompted increased caution among some of the dealers? Sentiment remains quite constructive in Asian markets as we build brand momentum. We have proactively aligned supply with immense accelerating shipments ahead of tariff implementation in The US to ensure dealer delivery is well positioned through the summer season as well. So so far so good, and we managed the relationship well with the strategic partners.

Speaker 2

On your second question about the NHTSA routine investigation. So as we have repeated many times, safety is an important aspect to us and we are cooperating with investigation by NHTSA as we have always been in the past. NHTSA generally does does not close this type investigation. They take no further action so long as BINFAS continue to honor its commitment in terms of the settlement. So we we continue cooperating with them.

Speaker 2

So far, no no feedback for the past few months.

Speaker 1

Thank you, madam. Have the next question from the floor. What is the current status and projected plans for The USA manufacturing plant in North Carolina?

Speaker 2

Thank you. So The US remains one of our key markets, and we are committed to it for the long term. This is reflected in the fact that we have made no changes to our plan to have an North Carolina facility by 2028. We will continue monitoring the macroeconomics and geopolitical developments and revise our plan if needed. With the the current market backdrop has also provided us with an appropriate window to adjust our execution focus.

Speaker 2

So we are also focused on fostering dealer performance and also expanding our dealer pipeline across The US. We thank our dealers for their cooperation and support and continue to have meaningful dialogue as we work together through the macro uncertainty. So thanks. We we really thank them for that.

Speaker 1

Thank you, Madam Pui. We have the next question from the floor. How is the expansion into Indonesia and The Philippines progressing?

Speaker 2

Very well for both markets. We are very, pleased with the the progress in both markets. For Indonesia, we started delivering VF three, VFI, and VF e 34. We have about we deliver about 3,000 VFE 34 for GSM and about 500 vehicles for b to c customers in in the market. Indonesia is the first real fast overseas market outside of Vietnam, where we implement the whole full green mobility ecosystem, which means the GSM for the green taxi and VGreen for charging station.

Speaker 2

We launched GSM in Jakarta last year and end of last year. And we we started expanding the VGreen charging network in in Indonesia. Our dealership network consisted of 22 showrooms as of 03/31/2025, and we are on track with our target to have about 80 showrooms by the end of the year as we continue expanding our relationship with the dealers. About Philippines, we have introduced five models in The Philippines with the VF six being the the latest one to be introduced. We we also started expanding our dealership network and service center.

Speaker 2

We have six showrooms by the March and aim to have 50 showrooms by the end of the year. And we the charging station network is already present in The Philippines, and we expect to see GSM taxi in The Philippines soon as well.

Speaker 1

Thank you, madam Twig. We have our next question. It's about tariff. What is your view on the potential impact of the new U. S.

Speaker 1

Tariff on consumer car spending, both in Vietnam and in your key international markets? How is VinFaZ preparing to respond for each market, and what forms of government support are you expecting?

Speaker 2

The government support in Vietnam or okay. In Vietnam. Vietnam. It's from the analyst in Vietnam. Okay.

Speaker 2

So I guess the tariff reciprocal tariff is the most popular keyword these days. I think we we are closely monitoring and believe that at this stage, it remains premature to determine the final trajectory of the tariff as further developments and influencing factors are yet to unfold. We have proactively brought in inventory of model year 25 vehicles to North America, which unaffected by the new tariffs, and we have sufficient inventory in the interim. In 2024, the U. S.

Speaker 2

Accounted for only 4% of total deliveries. And so we believe that the impact of The U. S. Tariffs on automotive, I mean, we impacted only by automotive tariff for now, not the reciprocal one. So we expect that the impact of The U.

Speaker 2

S. Automotive tariffs on us is less severe compared to other OEM. It's heavily reliant on The US market. Our 2025 guidance announced in February already took into account potential political and economic uncertainties in The US. And it is important to highlight that majority of our growth in 2025 is expected to be from non US market.

Speaker 2

We we don't we don't expect government support in in Vietnam even though we I think in Vietnam, we do have, like, some waiver of some registration fee, but we we don't expect at least it's not in our projection to have any government support in any meaningful way.

Speaker 1

Thank you, Madam Tui. We have the next question from the line. In the past, Vinhfa had talked about battery leasing as a unique differentiator of your market entry. Can you explain the rationale to discontinue this offering?

Speaker 2

Okay. I talked about it a little bit in my earlier speech. So battery leasing play a vital early role in the early days of EV adoption as it really had narrowed the price gap between internal combustion engine vehicles and EVs. But as the consumer familiarity with with EVs growth, battery leasing as a percentage of sales has dropped for us from 80% at the beginning to about 30% below 30% recently. So it's just it's the right time for us to to drop the battery leasing.

Speaker 2

And to ease the transition, we extend extended free charging benefits to the customer. So six months for easy owners and one year for e scooter owners through 2027.

Speaker 1

Thank you, Madam Tse. We have the last question from the line. Can you remind us what are key priorities for 2025 and how that aligns with your go to market strategy? And what are you most excited about for VinFast over the next twenty four months?

Speaker 2

Oh, thank you. So the priorities for us in 2025, first of all, solidifying the leadership position in Vietnam and continuing to build brand awareness and strengthening performance and presence in new markets. Secondly, to employ enhanced CapEx manufacturing to support business growth. We're opening three more factory this year. And then finally, driving product innovation through segmentation and again, focus on cost optimization.

Speaker 2

So our go to market strategy is built around three pillars of products, manufacturing capacity and market rich. And we are and this all aligned with our 2025 priorities and long term goals. Well, what exciting about I mean, exciting development as infrastructure on engineering fund. We wouldn't be launching new vehicle platforms this year to simplify and increase platform commonalities across the models. So this will in turn lead to more cost savings, and we are also working hard on new technologies, and we'll share more details with you later.

Speaker 1

So all in all, the path ahead of us is very clear. I'm very excited about the future of FinFast. Thank you, madam T. I think we're coming up to the one hour mark, and thank you everyone again for joining us today. If you need any further clarification, please let us know by sending an email to ir@linfastauto.com.

Speaker 1

Take care, and goodbye. Thank you.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Earnings Conference Call
VinFast Auto Q4 2024
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