VinFast Ramps Up: Affordable EVs, New Factories, and Emerging Market Focus

I'll take the VF three and VFI affordable model as example. IG was designed to somehow push the population of people who have never used car before or who are sitting on the fence between ular and four wheeler. We make a lot of them realize that they now can own a car, electric car that are very well designed and functional and hasty in it as well. Wow.

Global electric vehicle sales are on track to reach 20 million this year, but in the US the market is more uncertain. Policy on EV remains unclear and federal incentives are at risk. Meanwhile, automakers are adjusting strategies as affordability and access to charging stations. Reshape the next wave of adoption emerging against that evolving landscape is VIN Fasts, a Vietnamese EV manufacturer that produces electric cars, scooters, and buses. VIN Fasts aims to differentiate itself in the US market by offering lower prices, longer warranties, and fresh car models. As consumer habits shift under its parent company VIN Group, the VIN Fasts brand is quickly going global, expanding across Asia, India as well as the United States and Canada, all since its founding. In 2017, recent quarterly earnings saw the company losing over $700 million, which was 20% worse than the previous year. Despite the loss shares were up nearly 7% on the report and revenue and deliveries beat forecasts.

(01:16)
The market also noted somewhat improving margins and the continued financial backing of VIN Group and its founder. We sit down with Vin Fast's, chief Investment Officer Chen Newan and head of investor relations, Amanda Bay, to talk through the company's expansion, the affordability equation, and how they're navigating a rapidly shifting EV landscape. Let's get into it. Chen and Amanda, thank you very much for joining. We've lots to talk about when it comes to VIN A specifically, but let's talk about the market and the different competitors in it right now and where it is that you are positioned. If I take a big step back and I've got your investor presentation in front of me and I can see the range that you address in terms of the different potential consumers at the low end of the really affordable end, you do have BYD competing. We've got Tesla about to move aggressively into that space at the middle to higher end. You've got Tesla already and then you take a look in the US market at the Lucid in the Rivian and it's just been really tough. Share prices are down across the board. We've got a very unclear US policy landscape. What's your edge and how are you feeling about it?

Right, thank you. And as you Riley say, it is a very competitive market at the moment and the vision of our company is to create a sustainable future for everyone and what everyone really cover. Our product philosophy is about creating EV products for every customer needs at every different pricing point. Obviously when it comes to the quality of the car, the optionality, we try to be as diverse as possible and at the same time we want to provide the market with high value. But competitively price ev it is well reflected in our comprehensive vehicle lineup. Within three years since our pivot into ev, we have introduced to the market 10 electric car, nine E scooters and three E buses. Right? And each of them are designed to serve a different purpose and for that reason, a customer base is really diverse, can be young professionals to young professionals to big families. It can be first time formula user to EV enthusiast.

Do you think there's a risk in being diverse that too much diversification means limited focus?

Not really, because our focus is on individual segments and by going to the market with a lot of different options, we actually expose ourselves to a bigger total addressable market.

(03:44)
I'll take the VF three and VF five, our affordable model as example IG was designed to somehow push the population of people who have never used car before or who are sitting on the fence between ULA and ular. We make a lot of them realize that they now can own electric car that are very well designed and functional and hasty in it as well. And those people now has really helped us as they're our supporter, as our consumer, not only in Vietnam but in others Southeast Asian market as well. In the US we are targeting something different. We introduced the VFA VF nine, maybe you have seen it on the street, maybe you've seen it on the tele, but they are very premium products with spa needs with a lot of smart feature. It is a totally different demographic that we are targeting. Coming back to your point earlier, it is about having a wide range product, but each of them are initially focused for a different customer base.

You are diversified by geography as well. So walk us through the different countries that you are serving and then how big are each of those in terms of proportion of your

Revenue? Sure. So we have a globally diversified revenue base. We are in over 10 countries and counting. I would say last year Vietnam accounted for about 90% of our revenues. North America including US and Canada accounted for slightly less than 5% and the remainder was a little bit from Indonesia and the Middle East for this year. We mentioned in our earnings call that we're maintaining our target to at least double deliveries. So that means really that we are still focused on executing globally.

When

We look at the opportunities across the globe and the reality about where our management focus is in execution, Southeast Asian India is the core growth engine for us this year. So when we think about the US tariffs, how does that all impact us? Right? Reality is the US was a marginal contributor last year. We still have a presence here and long-term it's an important market. But the reality is EV adoption in Southeast Asia and India is accelerating a lot faster than this part of the world. And that's through a combination of factors, regulatory factors, consumer openness, affordable models play a big part in EV adoption there.

So given all the opportunity that exists for you in Southeast Asia and the fact that you're already there, you're already at scale in Vietnam for example, why continue to pursue a US strategy? I did see that last year you announced you were delaying the going live of your US manufacturing plant in the Carolinas, given the tariff regime now I'm sure that that delay perhaps feels a little more painful even than it would've done this time last year. Why bother? Why focus on this market? Because every market you've described outside it as a massive opportunity.

I could say Roy, we are designed to be a global OEM is our vision from day one. And it is well reflected by the fact that we came to the US first and we become a US listed company.

(06:47)
You are right. We have a competitive edge. We have a playbook to succeed in Vietnam, to succeed in Vietnam, and we are going to leverage the same playbook across Asia, but at the same time, we are maintaining our presence elsewhere in the world. And once we have fully executed our focus in Asia, the next step will be to become a global OE EMM with true global presence. I think one, there is one misconception about EVs, not necessarily only in Asia, but also here in the US as well, is that EV have to be a premium good. And it's not true with the VF three and VF five. We have really changed the perception in Vietnam and we do see that the changing perception is a strong catalyst for mass adoption. Can you guess on what is EV adoption in Vietnam today?

I can't guess. Tell me what it is.

It is 20% at the end of last year and 40% in Q1 this year and we supply most of those car. So we are uniquely positioned with global presence, but at the same time we have a very strong home market in Vietnam and that is the platform for us to think about our international ambition.

Let's talk about your new growth opportunities. I think this is very exciting and let's talk about the new plant that you've announced in India. How is that going and how does that change your global supply chain?

Yeah, so I think from day one, we understand the importance of manufacturing excellence in the success of N-E-O-E-M and as we grow globally we want to map that growth plan with our manufacturing capability as well. And we actually are opening three new CKD plan this year, as you rally say. The number one is in India, which we will go into operation next month.

(08:29)
We have a second one in Vietnam that is dedicated to affordable models, VF three, VF five, and the new menial green and it will be located in central Vietnam and later in the year, we'll also SOP on our Indonesia CAD plan as well. So net right, this is a pivotal year because we are going to double our desire capacity from 300,000 to 600,000 car per year. For our audience who doesn't know what that capacity is, the maximum number of car that you can produce every single year. India is exciting market. It's shared a lot of similarities with Vietnam, big population, young population, tech savvy. A significant portion of the population is entering middle income class and they are open to new technology, strong legislative support from the government for EV adoption as well. We have executed our plan in Vietnam with the ecosystem approach, which maybe we can elaborate a bit more later on. And we are looking to bring the same ecosystem, including the taxi company that use our car and then a charging infrastructure company altogether to the new market, including Indonesia, the Philippines, and give the people of those country the opportunity to try our car and realize how good it is.

One similarity between these markets, there's still largely two wheeler markets. Four wheeler ownership is less than 10%, and so it's not just about the large population and openness to it, affordability is key. And so getting them to leapfrog from a two wheeler leapfrog that ice vehicle stage to an ev, that's where VIN Fast plays that role with our affordable models. But in India, interestingly, the consumers are super tech savvy, so we're actually starting with the mass affluent models, the VF six and VF seven.

It's interesting, one of the interviews we had previously on after Ownings was with the chief financial officer of Grab and we yes, we know them. So Peter oie, fantastic guy. And we had a really interesting conversation around technological adoption, ride hailing adoption, and I did notice that vehicles for premium ride hailing services is something that you've actually focused on as a niche market. Talk to us about that and how you can see that growing over time.

So that's right. We have a sister company called Green and Smart Mobility,

(10:49)
Which is basically a taxi service and ride hailing service in Vietnam and they will expand, they will go with us to Indonesia and the Philippines as well. Initially they used our passenger car models, a VF five and VF eight, but now we have developed a dedicated vehicle light up called the Green Series of four different models dedicated to taxi. So they will be our customer. And at the same time we are selling to other taxi services in Southeast Asia as well. The idea behind it is that we believe EV adoption needs to be fostered not only through ownership model, but also a usership model. And share mobility is the strong catalyst for electrification.

Just to add that of the four new models under the green series, two of them are actually modifications of existing ones. And now what really that means is we've actually tweaked the technology taken out some components that are not necessary for a commercial driver to have, right? And so when you think about our broad portfolio, and at the same time we are going for volume growth plus getting to that path towards profitability, taking those vehicles, taking out some of the components, making it more cost efficient, that's also part of our strategy to get us towards that path to profitability.

If I'm not wrong, we are the first OEM global ev, OEM, global Leaf that have a dedicated light up for taxi and right here I believe so. Yeah, we are.

Interesting, interesting. Let's talk some more about some of the things driving adoption. One is price and accessibility. Another one is actually the ways in which you go to market. Talk to us about the mix of distribution between direct to consumer direct sales, working with dealerships. How are you getting your vehicles into the hands of drivers?

So right now we're entirely focused on the dealership model in every market in almost every market, right? We still own some of our showrooms in the US and Canada and parts of Europe. So that was like phase one of our international strategy was owning your own showrooms, controlling the brand, the after service quality. But that is over time not a sustainable operating model. So last year in all the newer markets that we entered in like Indonesia, Philippines, and then this year India, it's all dealer dealership model.

Got it. And then another piece of adoption is the ease with which the consumer can charge their cars.

Yes.

Talk to us about your charging strategy. Is there a unique charging station that only your

Vehicle? Absolutely.

Okay, got it. So you're not going to move to the model where it's accessible charging and other vehicles?

Well, the time being, it is a deliberate strategy. We have a separate company owned by our founder called V Green that develops charging networks all across Vietnam.

Okay.

So Vietnam is a very unique example. Chien mentioned that it has 40% market share and getting consumers, I'm sorry to get over that hurdle about charging anxiety was simply because VG Green was able to build up that network and make it very visible and accessible to everyone. VG Green is entering some of our newer markets like Indonesia, Philippines, and India, and we're going to be co-investing with local partners there to build up this network.

So at the moment, VG Green is managing about 90,000 Z thousand charging point in Vietnam for us, and that's almost 100% of the public charging point in the country creating a huge entry barrier for overseas OEMs to come in and compete with us. Similar, the situation in Indonesia and Philippines is a bit different because even though they have big population, the number of charging point available isn't that many. So they are coming in and being a game disruptor in those countries as well. Is that important to say? Beyond those market, we also work with charging company third parties. Our customer globally have access to more than 1 million charging point, including a red thousand in Europe and about 150,000 here in North America.

You've made reference a couple of times to other companies within the ecosystem. So let's talk about VIN Group. Just clarify for us how much of VIN Fasts VIN Group continues to own and describe with some specificity, if you don't mind, some of the ways you work with other VIN group companies for different parts of executing your own business plan.

Sure, of course. It's impossible to talk about VIN fasts in isolation from VIN group. So when we started in 2017, we were established as the automotive arm of VIN Group.

(15:14)
And for people who do not know VIN Group yet, it is one of the most prominent conglomerates in Southeast Asia with business activities across river states, hospitality, retailer technology and social enterprises. And from day one, we have been at the heart of the growth story. Having the food and backing from the founder, Mr. Being part of that ecosystem really benefit us because let's say when it comes to charging, a lot of the charging facility developed and managed by Reen is actually located on site of VIN Homes, which is our real estate developer business. Got it. Or at the retailer vin vin com retail. But more than that, VIN group has a lot of technology company within the ecosystem, vin ai, vin Print, VIN CSS, who take cares of the AI integration of offensive and defensive cybersecurity and other software that we integrate into our car. I'm very proud to say that we are taking care of the majority of the software development work for VIN Fast Car. On the financial side, we have full backing from VIN Roof and from mr. And last year they have announced a financing package of 3.5 billion US dollars to ensure that VIN Fast will be taken care of on our route to profitability.

And so what proportion of your shares right now are publicly traded?

We have a small float,

What is it?

2%?

2%.

And VIN Group owns just over 50% VIN group directly, and our founder owns the remaining. So we acknowledge that this is, we get asked this question a lot and definitely we are always actively monitoring capital market opportunities and when it's the right time at the right price, we'll be happy to pull the trigger.

So when you think about your US shareholders, again, you're listed on the nasdaq, that 2% is traded on the nasdaq and this model of an auto company that is part of a family of other businesses in other industries is a pretty unusual one for here. Right, and it's interesting actually because Tesla's probably the closest you get to it just because Elon Musk personally touches so many other businesses and if you read about how he operates as companies, he does borrow engineering talent, for example, from his different businesses. You had the ability to do that with other entities within B Group, but the idea that only 2% of your stock is publicly traded for a US shareholder, what do you to your US shoulders with respect to why it's advantageous for them?

Yeah, I can take this one. Yeah.

Okay.

Okay. I think when it comes to capital racing and when it comes to chef load, we understand the position when it of the low flow that we have

(18:09)
Is well reflected. The idea behind the fact that Fin Fasts for now is fully financed by the conglomerate and by the founder, but at the same time, we keep our mind open when it comes to financing opportunities and we actually work with a lot of financing partner on the ECM side and the DCM side. And when the right term comes, we will start opening up more to the market. When it comes to the equity story of VIN fast, we think about not only as an EV company, but also it is an emerging market opportunity for investor in the US because Vietnam and ev, it is unlikely combinations, right? You haven't heard that before. So when VFS is a representation of the strong and growing consumer market in Vietnam with the weakening of the US dollar, US dollar currency this year we see more and more capital flowing into emerging market. And study has shows that every 1% witness in the US dollar will lead to 2.5 to 3% increase in return for emerging market. So yeah, VIN FAST is your entry point to Vietnam, and it is more than an EV stock. It is adaptable opportunity for investor here.

And I'm going to add also if you were to ask that question again, what do we say to our US shareholders currently who say thank you for believing in us last year? We have demonstrated that we can execute on volume growth on our recent earnings call, we reiterated our target to reach brick even in 2026. So the existing shareholders who are already holding our stock, we've proven that we can execute on our delivery target last year.

We

Are reiterating our targets for this year and next year, and we're going to demonstrate that quarter by quarter

Your loss was bigger than expected though. For Q1 it was about a hundred million dollars bigger than analysts had anticipated. What drove that miss and what is being done to close that gap? So you do in fact here your guidance for this year.

So it's important to see that Q1 is typically the lower quarter in the year for the automotive industry in Vietnam. And we anticipated that. And actually the fact that we delivered 36,000 vehicle in the first quarter was a strong statement for our scale up. Last year we delivered 97,000. So in the first quarter of this year, we are already nearly getting to about 40% of the number, and it's still growing because we are producing as a relatively smaller volume compared to Q4. Last year we anticipated a slight deterioration margin, but on a year over year basis, it is improving. And if we carve out all the accounting adjustment in garage profit margin, it is actually improving from minus 26% to about 20%. And this is excluding most important item is the impact of the free charging program that we are offering in Vietnam. Basically, anyone who own VIN Vasca in Vietnam will have free charging until 2027. It is a big financial commitment, but it shows our vision for VIN FFAs and for E mobility in Vietnam.

Back to your point on driving adoption out of the gate as quickly as you can. Thank you both very, very much for joining. And I think one point that you said that really landed with me, this is not only a way to invest in EV, but at an entry point to Vietnam, which I think to your point, there's been a lot of conversation about investors in the US diversifying into emerging markets. So come back, we want to hear more about it as your year progresses. Thank you for having us. I'm Anne Barry. Thanks for tuning into After earnings, the show that brings you up close and personal with the executives behind the world's most interesting publicly traded companies. If you learn something today, don't forget to like, subscribe and share with your friends. Come back and we'll see you soon.