VinFast (NASDAQ:VFS), the Vietnamese electric vehicle (EV) manufacturer, reported a 3.4% increase in its net loss for the fourth quarter compared to the previous quarter. Despite this setback, the company remains optimistic about its prospects for the year ahead, aiming to nearly triple its vehicle sales as it ventures into new markets.
In the final quarter of 2023, VinFast recorded a net loss of $650.1 million, marking a 1.3% rise from the same period in 2022. The company is determined to ramp up deliveries to 100,000 units this year, a significant jump from the approximately 35,000 units sold in 2023. VinFast fell short of its 50,000-unit target last year due to sluggish EV adoption in certain regions and heightened price competition.
Chairwoman Le Thi Thu Thuy expressed confidence in achieving their sales guidance for 2024, citing global expansion plans and the availability of right-hand drive models. Thuy emphasized VinFast’s commitment to expanding into new territories while remaining optimistic about meeting their targets.
In contrast to other automakers, which have revised their EV sales projections downward and scaled back investment plans due to softening demand in key markets like the United States, VinFast remains resolute in its growth trajectory.
The company, which entered the U.S. market in March last year with its VF 8 sport utility vehicle, primarily relies on domestic demand, with approximately 70% of deliveries going to its affiliate Green SM (GSM), a taxi operator and leasing provider backed by VinFast CEO Pham Nhat Vuong. Thuy noted that VinFast’s North American sales were modest, with fewer than 1,000 units sold, but expects new dealership channels to bolster sales this year compared to its direct sales approach.
Despite fourth-quarter revenue reaching $437 million, falling short of the average analyst estimate of $570.9 million, VinFast’s full-year revenue surged by 91% to $1.2 billion, showcasing its robust growth trajectory.
Founded in 2017 and producing EVs since 2021, VinFast has outlined ambitious plans for international expansion, including the construction of a factory in North Carolina scheduled to commence operations in 2025. Additionally, the company is eyeing its first manufacturing facilities in India, targeting two major markets, Indonesia and India, where it plans to introduce a battery leasing scheme to make EVs more accessible to customers.
VinFast’s market capitalization experienced a significant surge to $85 billion following its Nasdaq debut in August but has since declined to $12 billion amid heightened competition, particularly from market leader Tesla. Shares in VinFast, backed by Vietnam’s largest conglomerate Vingroup, were down 2.66% in premarket trading.
Looking ahead, VinFast intends to initiate a fundraising process after the blackout period ends on February 26, aiming to increase the number of shares available for public trading to 10-20% by the end of the year, up from around 2% currently.
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