Vietnamese electric vehicle maker VinFast reported a more profound net loss in Q1 2025, even as vehicle deliveries surged. The company, backed by conglomerate Vingroup, is racing to scale production amid fierce global competition and a weak demand outlook.
VinFast posted a net loss of $712.4 million for the quarter ending March 31, its sixth straight quarterly loss. Although an improvement from the $1.3 billion loss in Q4 2024, it marked a 20% year-on-year increase, surpassing analysts’ expectations of $616.3 million, according to LSEG data.
However, revenue soared 150% to $656.5 million, beating estimates, driven largely by domestic demand. Deliveries rose nearly 300% to 36,330 units, with the bulk of sales in Vietnam, where smaller models like the VF 3 and VF 5 made up 68% of all units sold.
Shares in VinFast jumped 10.5% in pre-market trading following the earnings update. Yet despite the boost, the company’s gross margin remained deep in negative territory at -35.2%, though it improved from -58.7% a year ago. VinFast continues to sell vehicles at a loss, underlining ongoing struggles with high manufacturing costs and limited economies of scale.
The company has been shifting its focus to Asian markets, where costs and tariffs are more favorable. A new assembly plant in India is scheduled to begin operations by July 2025. The move aligns with VinFast’s strategy to reduce reliance on costly U.S. operations, where a 25% import tariff has hit margins.
VinFast is also investing in its electric bus division, with plans to offer vehicles in 6-, 8-, 10-, and 12-meter sizes. It is targeting expansion in Indonesia, Europe, the Middle East, and the U.S., having already delivered buses in large volumes domestically.
R&D spending dropped 22.3% year-over-year, even as the cost of sales more than doubled. Analysts say the firm continues to pay more than rivals like Tesla and BYD, due to smaller production volumes and a limited supplier track record.
VinFast plans to unveil a next-generation EV platform in Q3 2025, starting with the Limo Green model. This new electrical architecture will support its lineup from 2026 onward.
Despite ongoing losses, VinFast has remained afloat with over $2 billion in financial support from founder and CEO Pham Nhat Vuong and Vingroup. The challenge now is turning soaring delivery numbers into a profitable business model.
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