Vinfast delivers fewer EVs than planned in 2023

VinFast has presented its business figures for 2023. The Vietnamese manufacturer delivered 34,855 electric vehicles last year and posted a gross loss of just over half a billion US dollars. Vinfast aims to sell 100,000 cars in 2024.

Image: VinFast

VinFast fell short of its expectations. In October, the manufacturer said it wanted to deliver between 40,000 and 50,000 vehicles in 2023. It only delivered 34,855 units. In the second half of the year, VinFast delivered a five-digit number for the first time. After handing over 10,027 EVs to customers in Q3, it was 13,513 in Q4. The trend is rising, especially as the company opened the order books for the VF 6 in its home market in October. The VF 7 and VF 3 models will launch in 2024. VinFast has set a delivery target of 100,000 vehicles for the current year.

Of course, that will only impact the balance sheet in the future. For the time being, VinFast remains deep in the red. Turnover in 2023 was around 1.2 billion US dollars, with a gross loss of 551.6 million US dollars. The manufacturer reports a gross margin of -46 per cent.

The 2024 business figures are expected to improve thanks to cost-cutting programmes. According to VinFast, it “is pursuing initiatives to reduce material costs by 40% within two years of each model launch.” On the one hand, through technical measures such as the redesign of components and the optimisation of the platform, and on the other hand, through procurement and purchasing initiatives, including in-sourcing and supplier changes.

At the same time, VinFast wants to expand into new markets – particularly “untapped, volume-driven markets closer to home like Indonesia and India” – and expand its distribution channels. The aim is to open around 400 sales outlets worldwide by the end of 2024. In addition, it “will broaden the distribution channels through leveraging the local network and expertise of 3rd party dealerships and distributors.” VinFast changed its sales strategy a few months ago and switched from a direct sales model “to a capital-light hybrid model with a strong focus on leveraging existing distribution infrastructure by building a dealership network in the US and globally,” according to an accompanying press release.

VinFast also has high hopes for its battery leasing approach, which should reduce the purchase price and thus boost sales in new markets. Leasing could reduce monthly operating costs to the level of many combustion vehicles currently on the market, according to Vinfast.

Meanwhile, the Vietnamese company confirmed that it will begin building its electric car factory in India on 25 February. The plant in the southern Indian state of Tamil Nadu will be designed for an annual production of 150,000 vehicles. The manufacturer has also recently announced that it has signed a Memorandum of Understanding with three Indonesian business customers to supply 600 electric cars for their company fleets.

Incidentally, these activities bear the new boss’s signature. VinFast made a personnel change at the turn of the year and appointed its founder and largest financial backer, Pham Nhat Vuong, as the new CEO. In this role, he replaced Le Thi Thu Thuy, who had held the position since 2021 and now directly oversees VinFast’s global business, including production, sales and marketing. Vuong is also the founder of the parent company Vingroup. It is Vietnam’s largest business conglomerate.

Vinfast was founded in 2017 and initially produced combustion cars, but began building electric vehicles in 2021. The reason for the change of position in an accompanying announcement earlier this year was that the time had come to further develop the company’s management after entering the North American market. Vinfast made its debut on the US stock exchange in mid-August 2023 via a SPAC deal. Valued at 85 billion dollars at the IPO, Vinfast had a market capitalisation of just 16.4 billion dollars at the beginning of January., (India), (Indonesia)


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