Executive Summary / Key Takeaways

• VinFast is rapidly expanding its electric vehicle (EV) and e-mobility ecosystem, achieving significant delivery growth of 172% year-over-year for EVs in Q2 2025 and maintaining market leadership in Vietnam.
• The company is strategically shifting its focus to high-growth Asian markets, supported by new CKD manufacturing facilities in India and Indonesia, and a dealer-led distribution model globally.
• Technological advancements, including next-generation vehicle platforms and zonal E/E architecture, are central to VinFast's strategy for cost optimization, enhanced performance, and a clear path to gross margin profitability by 2026.
• Despite current net losses and cash burn, VinFast's liquidity position, bolstered by significant capital support from its founder and Vingroup Joint Stock Company (OTC:VINGF), provides ample runway to execute its ambitious growth and profitability roadmap through 2026 and 2027.
• Key risks include intense competition, macroeconomic uncertainties, and the initial costs associated with rapid expansion and new product generations, though management anticipates normalization of some headwinds like warranty provisions.

Vietnam's EV Powerhouse: A Foundation for Global Expansion

VinFast Auto Ltd., a subsidiary of Vingroup Joint Stock Company (OTC:VINGF), has rapidly emerged as Vietnam's leading automotive manufacturer since its pivot to a pure electric vehicle strategy around 2022. The company's mission is to create a green future by making EVs accessible to everyone, a vision it is aggressively pursuing through a diversified product portfolio and a unique "green mobility ecosystem." This ecosystem, comprising VinFast's EVs, the GSM (Green and Smart Mobility) EV taxi and ride-hailing service, and the V-GREEN charging network, has been instrumental in driving EV adoption in Vietnam and now underpins its international expansion.

Vietnam serves as a powerful testament to VinFast's strategy. The nation's auto market experienced rapid growth in the first half of 2025, with deliveries surging 1.6 times year-over-year to 254,794 units, primarily fueled by increasing EV demand. VinFast significantly outpaced this growth, achieving 3.4 times volume expansion and delivering 67,569 units in the first half of 2025, surpassing the combined deliveries of its next two competitors. This performance has solidified VinFast's position as the number one car manufacturer in Vietnam since September 2024. The Vietnamese government's ambitious goals—targeting 30% electric cars by 2030 and 100% by 2050—along with EV-friendly incentives like lower consumption tax and registration fee exemptions until 2027, create a highly supportive environment for VinFast's continued domestic dominance.

Technological Edge: Driving Efficiency and Experience

At the heart of VinFast's long-term competitiveness is its commitment to technological innovation, particularly through its next-generation vehicle platforms and zonal Electrical and Electronic (E/E) architecture. These advancements are designed to simplify engineering, integrate world-class technologies, and enhance efficiency across the product lineup.

The new vehicle platforms emphasize "competitiveness, commonality, and cost efficiencies." By underpinning multiple models, these platforms significantly increase component commonality, leading to streamlined procurement and manufacturing processes. This approach is expected to drive substantial cost reductions through economies of scale and improved operational synergy. For instance, the new Ha Tinh factory, inaugurated in June 2025, aims for over 80% localization by 2026, further enhancing cost control and supply chain resilience.

Complementing this, VinFast's internally designed zonal E/E architecture, controlled by a centralized supercomputer, represents a major leap forward. This architecture reduces ECU complexity and minimizes traditional wire harnesses, directly contributing to bill of materials (BOM) cost optimization and production efficiency. Critically, it also enhances the customer experience by cutting over-the-air (OTA) update times from hours to less than one hour, enabling more reliable remote updates. The Limo Green MPV, delivered in early August 2025, is the first model to debut with this next-generation platform and zonal E/E architecture, showcasing the tangible benefits of these innovations. VinFast's R&D efforts are ongoing, with new models like Minio Green and EC Vans expected to hit the market soon, and existing models slated for technology refreshes beginning in 2026. These technological differentiators are crucial for VinFast to build a sustainable competitive moat, improve financial performance through lower costs and better margins, and solidify its market positioning as a provider of accessible, advanced EVs.

Expanding Horizons: A Global Ecosystem Play

VinFast's strategic narrative extends beyond Vietnam, with an aggressive international expansion plan focused on high-potential Asian markets and a recalibrated approach in North America and Europe. The company's "green mobility ecosystem" is being replicated in new territories to accelerate adoption.

In India, VinFast opened for pre-booking of its VF 6 and VF 7 models in mid-July 2025, followed by the inauguration of its CKD manufacturing facility in Tamil Nadu in August. This facility, with an initial capacity of 50,000 units per year (scalable to 250,000), will produce the VF 6 and VF 7 for both the Indian domestic market and export. VinFast is taking a disciplined approach in India, focusing on customer satisfaction and dealer profitability in the competitive, yet early-stage, EV market.

Indonesia is another key market where VinFast is rapidly establishing its presence. The VF 3, awarded "Best EV City Car" at the Indonesia International Motor Show, represented 35% of VinFast's deliveries in the country in Q2 2025. The company is offering competitive incentives, including free charging, attractive financing, and a resale value guarantee up to 90%. V-GREEN is targeting approximately 63,000 charging portals in Indonesia by the end of 2025, while GSM Indonesia is scaling rapidly, operating 3,000 cars with 95% utilization and partnering with Gojek. The CKD facility in Subang, Indonesia, is on track for technical SOP by the end of 2025.

Similarly, in the Philippines, VinFast captured an estimated 25% market share in the battery electric vehicle segment in the first half of 2025, largely driven by the VF 3. GSM is disrupting the local taxi industry with a fleet of 500 EVs, and V-GREEN aims for 15,000 charging points by the end of 2027.

In North America and Europe, VinFast is rightsizing its operational footprint by transitioning from a direct-to-consumer (D2C) to a dealer-led distribution model. The first third-party dealership opened in California in August 2025, and by June 2025, D2C showrooms in Germany, the Netherlands, and California are slated for closure, to be replaced by dealer showrooms. This strategic shift aims to improve operational efficiency and leverage local expertise. While international markets contributed less than 10% of total deliveries in the first half of 2025, the mix has shifted, with Indonesia and the Philippines now being the main contributors, a change from the U.S. and Canada in the previous year.

Financial Performance and Outlook: Scaling Towards Profitability

VinFast's financial performance in the first half of 2025 reflects its aggressive growth strategy and ongoing efforts in cost optimization. In Q2 2025, total revenue reached USD 663 million, marking a 92% year-over-year increase. This was driven by a 172% year-over-year surge in EV deliveries to 35,837 units. For the first half of 2025, EV deliveries totaled 72,167 units, a 223% increase year-over-year. E-scooter and electric bike deliveries also saw remarkable growth, rising 432% year-over-year to 69,580 units in Q2 2025.

Despite this robust top-line growth, profitability remains a key focus. The gross margin in Q2 2025 was negative 41%, an improvement from negative 63% in Q2 2024, but a slight decrease from negative 35% in Q1 2025. This sequential decline was primarily attributed to higher warranty provision rates, a common characteristic of early product generations, which management expects to normalize over time. On a normalized basis, excluding certain sales reductions and provisions, gross margin was minus 20.9% in Q2 2025. Notably, the VF 3 and VF 5 models are already gross margin positive on a normalized basis.

Cost of goods sold in Q2 2025 increased by 66% year-over-year to USD 935 million, reflecting the ramp-up in deliveries. However, VinFast has demonstrated significant cost optimization, with average unit BOM and production costs for EVs declining by 16% and 43% respectively in Q4 2024. R&D expenses in Q2 2025 were USD 93 million (14% of revenue), decreasing year-over-year due to completed product development but increasing quarter-over-quarter for new models. SG&A expenses also improved, decreasing to 20% of revenue in Q2 2025 from 44% in Q2 2024, reflecting benefits from increased scale and the shift to a dealer-led model. The adjusted EBITDA loss for Q2 2025 was minus USD 419 million, with a margin of minus 63%, an improvement from minus 123% in Q2 2024. The net loss for Q2 2025 was minus USD 812 million.

VinFast has reaffirmed its 2025 delivery target to at least double its 2024 deliveries, with a significant ramp-up expected in the second half of the year. The full-year 2025 average selling price (ASP) is likely to remain under USD 20,000, influenced by the strong contribution of affordable models like the VF 3 and VF 5 (expected to be less than 50% of deliveries) and the growing Green Series (expected to account for almost a quarter of deliveries). Management anticipates achieving gross margin breakeven by 2026.

Liquidity is a critical factor for VinFast's ambitious plans. As of June 30, 2025, total liquidity stood at USD 4.2 billion, including cash and cash equivalents, USD 1.6 billion from the expected R&D asset spin-off (Novatech acquisition by the founder), and remaining fundraising commitments from Vingroup (OTC:VINGF) and its founder, as well as an ELOC facility. This substantial liquidity, further bolstered by project financing for its India and Indonesia plants, provides ample runway to execute its growth strategy through 2026 and 2027.

Operating outflows are projected to be USD 400 million to USD 600 million per quarter in the near term, with total cash burn for 2025 estimated at USD 2 billion to USD 2.5 billion, the majority allocated to CapEx for new CKD facilities and R&D for next-generation models.

Competitive Landscape and Strategic Positioning

VinFast operates in a highly competitive global EV market, facing established giants like Tesla (TSLA), as well as other emerging players such as NIO (NIO), XPeng (XPEV), and BYD (BYDDY). While competition is intense, particularly in Asia, VinFast's strategy is not merely reactive but a deliberate effort to build awareness and accelerate adoption.

VinFast differentiates itself through its focus on affordability, its vertically integrated green mobility ecosystem, and its rapid expansion in emerging markets. Unlike Tesla, which leads in premium EVs and advanced autonomous technology, VinFast targets a broader demographic with competitively priced models like the VF 3 and VF 5. Its ecosystem approach, integrating ride-hailing (GSM) and charging infrastructure (V-GREEN), provides a unique value proposition, addressing key adoption barriers like range anxiety and unfamiliarity with EVs. This strategy has allowed VinFast to gain significant market share in Vietnam, a feat not easily replicated by international competitors.

Compared to Chinese EV manufacturers like NIO and XPeng, which emphasize smart features and advanced driver-assistance systems, VinFast's technological roadmap for next-generation platforms and zonal E/E architecture aims to achieve similar sophistication while prioritizing cost efficiency and commonality. While NIO and XPeng have demonstrated faster innovation in certain tech-focused segments, VinFast's localized manufacturing and strong supplier partnerships are designed to deliver cost advantages and faster market entry in its core Asian markets.

BYD, a leader in mass-market EVs and battery technology, presents a formidable competitor due to its scale and vertical integration. However, VinFast's diversified portfolio, including e-scooters and e-buses, allows it to tap into broader urban mobility needs, especially in Southeast Asian markets where two-wheelers are dominant. VinFast's promotions and incentives, such as free charging and attractive financing, are strategic tools to build brand equity and market share in these competitive environments. As the company gains scale and its ecosystem matures, management expects promotions to normalize, with ownership experience, strong warranty (10 years/125,000 miles for vehicles, 10 years/unlimited mileage for batteries), and aftersales support becoming primary drivers of consumer confidence.

Risks and Challenges

Despite its aggressive growth trajectory, VinFast faces several risks. Macroeconomic headwinds and evolving regulations in various markets introduce uncertainties. The company's rapid international expansion, while strategic, entails significant upfront investment and execution risks in diverse regulatory and consumer landscapes. The higher warranty provision rates observed in Q2 2025, though expected to normalize, highlight the challenges inherent in scaling production of new vehicle generations.

The ongoing transition from D2C to a dealer-led model in North America and Europe may incur additional impairment charges in the near term. Furthermore, potential impacts from new U.S. tariffs on automotive imports are being closely monitored, though VinFast believes its impact will be less severe given the U.S. market's relatively small contribution to its 2024 deliveries and its 2025 guidance already accounting for such uncertainties. Intense competition across all its markets, particularly in Asia, necessitates continuous innovation and cost management to maintain market share and drive profitability.

Conclusion

VinFast is at a critical inflection point, poised for substantial growth driven by its robust performance in Vietnam, strategic international expansion, and a clear technological roadmap. The company's unique green mobility ecosystem, coupled with its focus on accessible EVs and cost optimization through next-generation platforms, forms a compelling investment thesis. While current financial metrics reflect the heavy investment phase of a rapidly scaling EV manufacturer, the significant capital support from its founder and Vingroup (OTC:VINGF) provides a strong financial foundation.

As VinFast continues to execute its strategy of deepening market penetration in Asia, expanding its dealer network globally, and leveraging its technological advancements for cost efficiencies, it is well-positioned to achieve its target of at least doubling 2024 deliveries in 2025 and reaching gross margin profitability by 2026. Investors should closely monitor the successful rollout of new models, the expansion of its charging infrastructure, and the continued improvement in its operational efficiencies as key indicators of its long-term potential in the global electric mobility revolution.