Q4 2024 VinFast Auto Ltd Earnings Call
Okay.
Speaker Change: Good day, and thank you for standing by welcome to they've been fast Oh, two limited Q4, 'twenty 'twenty four and full year earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during this session.
Speaker Change: You will need to press star one one on your telephone you would've done he an automated message of flash into your hand is priced two weeks to your question. Please press star one one again.
Speaker Change: Please be advised that today's conference is being recorded.
Speaker Change: I'd like to hand, the conference over to your speaker today.
Quinn: Quinn. Please go ahead.
Quinn: Thank you operator, and good morning, everyone does this mean when in fact Investor Relations welcome to our first quarter earnings Conference call. Joining me today are chairwoman of the board met them take less.
Speaker Change: And I was CFO Mr. Li.
Speaker Change: Nicole we will discuss our fourth quarter performance is this update and present our outlook for 2025.
Speaker Change: After management remarks, we will have 30 minutes for Q&A and.
Speaker Change: We will also reference a slide deck today, which is accessible on our website.
Speaker Change: Before I turn it over to Mary Lindsey, Let me remind you that some of the statements on this call.
Speaker Change: Forward looking statements under federal Securities Law.
Speaker Change: These include without limitation statements regarding the future financial and operating outlook guidance, Luckily economy industry trends company initiatives and other future events.
Speaker Change: These statements are based on the predictions and expectations as of today actually event only felt may differ due to a number of risks and.
Speaker Change: Some teeth.
Speaker Change: For you to the cautionary language and the risk factors in our most recent filings with the U S Securities and Exchange Commission.
Speaker Change: In addition management will refer to non-GAAP financials. During this call and discussion of why we use non-GAAP and information regarding the reconciliation of our non-GAAP versus get is available in the press release that we issued this morning you.
Speaker Change: You can also find it in our slide deck.
Speaker Change: And with that I would like to invite and get them to eat to start with management as Mike I'm thinking.
Speaker Change: And Hello, everyone.
Speaker Change: Thank you for joining us today.
Speaker Change: I'm thrilled to discuss Slimfast outstanding Q4, and 'twenty, 'twenty, four which was a year or two.
Speaker Change: That has been for us up well for 2025.
Speaker Change: He was a good year in which we exceeded our delivery packet established our market leadership in Vietnam.
Speaker Change: Rent it to new markets and made progress on our path to profitability.
Speaker Change: Before I recap the year I would like to take the opportunity to address the events that are currently reshaping the global trading landscape and we'll continue to take shape before stabilizing.
Speaker Change: In fact, we made a change to the changes in regulatory and geopolitical landscape.
Speaker Change: Our vertically integrated manufacturing capability and high localization rate are key competitive advantages are in fact doing this kind of a certain period.
Speaker Change: At the same time, we are taking proactive steps to safeguard and sustained sales performance, including strengthening customer and dealer engagement optimizing our go to market strategies and reinforcing brand awareness.
Speaker Change: We are focused on building greater products investing in innovation and ensuring that our customers get high quality affordable Evs.
Speaker Change: We are keeping our 2025 guidance and we continue to evaluate and be flexible as the landscape evolves.
Speaker Change: Let us now look like a 'twenty 'twenty four.
Speaker Change: We ended 2024 with a total delivery of 97399 E V globally exceeding our 80000 delivery target Q.
Q4, 'twenty 'twenty four for a steep ramp up output, what we set a new monthly delivery requests for every month in the quarter.
Speaker Change: Entrust continues to reshape customer behavior through a first vehicle lineup first of its kind green mobility ecosystem and pioneering incentives, including a free testing program in getting us.
Speaker Change: 'twenty 'twenty four also saw important progress in our international expansion.
Speaker Change: Is known Vietnam sales grew 10 times year over year, increasing contribution from 3% to 10% of our total deliveries.
Speaker Change: We also had our brand.
Speaker Change: In new Asian markets and continue to strengthen the Finfet dealer network globally.
Speaker Change: As of March 31st 2025, being flat at 322 showrooms of which 89% of dealer stores compared 223 showrooms as of December 31 2023.
Speaker Change: And of which 78% with the other stores.
Speaker Change: That is 60% growth.
Speaker Change: Our three new <unk> plants in Asia are expected to begin operations in 2025.
Speaker Change: They went into a holistic alignment between our market expansion and manufacturing capabilities.
Speaker Change: In addition to our strong topline growth full year gross margin, excluding and Abbvie and one off accounting charges.
Speaker Change: Narrowed to minus 32% from minus 40% in 2023.
Speaker Change: Q4, 2024 gross loss margin was impacted by an accounting Chad we.
Speaker Change: We had to book for the Windsor pre testing program for all E B Salt in Vietnam up until December 31, 2024.
Speaker Change: Oh, CFO Lanny will touch more on this later.
Speaker Change: Oh by then it was also strengthened with the disbursement of grant from our father and loan from Ing group.
Speaker Change: More specifically about deliveries during Q4 and recent business highlights.
Speaker Change: <unk> had.
Speaker Change: The record deliveries in all three months of Q4, bringing total deliveries for the quarter to 53139 electric vehicles globally increased by 143% quarter over quarter and 342% year over year.
Speaker Change: Our b to C sales grew by 140% quarter over quarter and over 20 times year over year propel.
Speaker Change: Proportion of EV delivery to non related parties customers was 81%, which increased from 78% in Q3, 24 and 18% in Q4 23.
Speaker Change: During the quarter, we also deliver 31170 E scooters, which increased by 65% quarter over quarter and 41% year over year.
Speaker Change: In Southeast Asia, we continue to strengthen our presence two foundational work and strategic partnerships with local businesses.
Speaker Change: Call that in 2023 and early 'twenty 'twenty four reinforced father also announced the launch of new separate entities.
Speaker Change: D S M a.
Dedicated EV taxi and ride hailing service and V Green.
Speaker Change: Charging network developer.
Speaker Change: Together with been fast this company's form a vertically integrated clean mobility ecosystem, which combines electric vehicles.
Speaker Change: Mobility services and charging infrastructure tackling the two biggest hurdles when it comes to early EV adoption.
Speaker Change: And familiarity with EV experience and anxiety overcharging.
Speaker Change: Outside of the Vietnam, Indonesia marked the debut of our Green mobility ecosystem with the launch of D. S. N. In Jakarta late December last year why V. Green also announced the commitment to build one of the largest charging network in Indonesia to Sabine pass car owner.
Yes.
Speaker Change: The Philippines, which is the second international markets for all clean mobility ecosystem.
Speaker Change: Has seen V Green announced mou's to establish charging stations across key cities.
Speaker Change: G. S. N is expected to launch later this year.
Speaker Change: As of March 31st 2025, we had 258 showrooms and dealer stores across southeast Asia, including 22 in Indonesia, and six in the Philippines.
Speaker Change: Our <unk> plant in Indonesia is on track to be operational by end of 2025.
Speaker Change: Indonesia, and the Philippines are represent the key long term growth markets and with Vietnam as the base for our broader Asia expansions.
Speaker Change: Our home market provides a strategic anchor that enhances our agility and strengthen our ability to scale successfully in new markets.
Speaker Change: In 2020 for Vietnam scope, not only as a home market, but also as a pet but falling class end to end E V strategy, we address key adoption barriers.
Speaker Change: Consumer and familiarity pricing gap and charging access through consistent execution anchored in three core values quality vehicles competitive pricing and exceptional after sales service policy.
Speaker Change: On the product side 2024, Mark the first year, where all seven models in our lineup we're in production and available in Vietnam.
Speaker Change: We have three N V. A five hour most affordable models reshaped public perception of Evs from luxury products to practical everyday vehicles.
Speaker Change: Together they accounted for 60% of total deliveries, which is remarkable considering we have three only started deliveries from last July.
Speaker Change: Our green mobility ecosystem have play a crucial role in overcoming consumer skepticism.
Speaker Change: And with anxiety by offering low risk exposure to EV before purchase.
Speaker Change: The V S. He said before our first EV model remains integral to our taxi operations and has paved the way for sand mobility adoption.
Speaker Change: Recognizing the importance of shared mobility services in accelerating kv transmission, we launch the Green series.
Speaker Change: Dedicated lineup payload for transportation use cases.
Speaker Change: This include Taylor version of there'll be a fine N V F E City for.
Speaker Change: Specifically adapted for transportation purposes, as well as two new models Nemo Green our entry into the MPV segment and medium Green decided to convert even more to when a user into four wheel EV drivers.
Speaker Change: We observed that this trend is being well adopted by 100 local taxi brands, who have started their journey of electrification.
Speaker Change: To complement our product offering in late 2024 been fast introduce a pioneering franchising program to all customers for over two years until 2027.
Speaker Change: This program was designed to minimize the cost of ownership, making them, even more accessible to a wider population and further driving EV adoption in Vietnam.
Speaker Change: As a result of our efforts well data from Vietnam a registration.
Speaker Change: Vin fast and at 2024 with around 20% total passenger vehicles market share.
Speaker Change: From just 2% in 2023.
Speaker Change: Delivering over 87000 vehicles up.
Speaker Change: By 171% year over year, and driving Vietnam, EV penetration to one of the highest levels in Asia.
Speaker Change: Publishing been fun as the nations number one auto brand.
Speaker Change: Realizing that we are entering into a new chapter. We also made an adjustment to our go to market strategy by removing the battery leasing program.
Speaker Change: This program has played a key role in narrowing the affordability gap between Evs and ice vehicles over the past year.
Speaker Change: Battery leasing was valuable in early days of EV adoption and has seen served its purpose and will discontinue as of March 31st 2025.
Speaker Change: On the manufacturing side as southeast Asia, only vertical integrated E V O N E.
Speaker Change: Our close proximity to key suppliers and manufacturing capabilities enables us to keep pace with strong demand to further enhance efficiency and capacity we broke ground on a second manufacturing facility in Vietnam last December.
Speaker Change: Got you to begin production in mid 2025, the new I think CK D plant and support our affordable model and unlock platform level synergies across our global footprint.
Speaker Change: Let's talk about India.
Speaker Change: In January we met our branded bread in India at the bar up mobility global exposure with the launch of the VX six and seven.
Speaker Change: We are diligently working to increase our brand awareness and local partnership ahead of the completion about coming out of a facility.
Speaker Change: This 400 acre integrated manufacturing facility is on track to begin operations by mid 2025 and.
Speaker Change: And in the commissioning phase with equipment systems and processes are being tested.
Speaker Change: We will start the CPD assembly for 50000 vehicles annually.
Speaker Change: Moving on to North America and Europe.
Speaker Change: Our 2024, it was a year of healthy growth of in fact in North America with the U S and Canada accounting for approximately 4% and 2% of our global deliveries respectively.
Speaker Change: The increased sales in the U S were driven by the introduction of the dealership distribution model. Besides it's our direct to consumer so.
Speaker Change: Our dealers local knowledge and connections have greatly help us with our go to market, allowing us to widen our market, which in a more cost efficient manner.
Speaker Change: Since late 2023, we have been transitioning from a purely direct to consumer to a hybrid distribution model with heavy focus on dealer showrooms.
Speaker Change: With a growing acceptance of the Vince brand in the U S and our strategic initiatives to optimize our footprint. We are taking this one step further with a plan closer of our D to C. Showrooms in California by the end of June 2025.
Speaker Change: This initiative comes with a gradual replacement my dealers showrooms, which is expected to drive greater efficiency in sales and marketing.
Speaker Change: In a similar fashion when fast is initiating a plan for a dealer network in Europe.
Speaker Change: The company has signed an agreement with Alto house of hoops to operate showrooms in Germany.
Speaker Change: And plan to develop a dealer network across the major cities in Germany, France, and the Netherlands.
Speaker Change: This approach enables win fast optimize operations.
Speaker Change: These risks and leverage local market expertise.
Speaker Change: As of March 31, 2025 been fast had 48 showrooms in North America and 14 in Europe.
Speaker Change: In the U S. We have developed a network of.
Speaker Change: 38 dealer.
Speaker Change: Now, let me walk you through our three pillar growth strategy.
Speaker Change: Up capacity.
Speaker Change: Which will drive our 2025 target of doubling 2024.
Speaker Change: <expletive> products.
Speaker Change: Our mission is simple to make easy accessible to everyone with multiple brands segment to serve various use cases.
Speaker Change: <unk> capacity with the new CK D facilities coming on in 2025, we are effectively adding capacity of up to 300000 vehicles per year to our total design capacity.
Up with our focused market.
Speaker Change: Finally market rich.
Speaker Change: Expansion in Asia will continue to be our top priority for 2025.
Speaker Change: At the same time, we will continue our strategic expansion of our dealer network in other regions and evaluate the local demand environment to determine which new models introduced.
Speaker Change: Our 2025 guidance reflects our strong confidence in our ability to grow market share in Vietnam, and expand internationally, especially in Asia, which remain central to our long term growth strategy.
Speaker Change: To support this week.
Speaker Change: We have taken proactive steps to localize manufacturing and build strong partnerships with local dealers.
Speaker Change: This effort peppers, better navigate different regulatory environments and operate more effectively in diverse markets.
Speaker Change: Southeast Asia continues to attract attention from global automakers, but one of the things that sets <unk> apart is our ecosystem approach.
Speaker Change: By integrating services across our Green mobility network, we are creating a strong foundation for long term easy adoption and building lasting brand value.
Speaker Change: With that I will hand, it over to learning to discuss our financial result and outlook.
Learning: Thank you Mike M T. Despite a challenging macroeconomic backdrop of it fast concluded 'twenty 'twenty four with strong operational momentum laying a foundation for further growth in 2025 as of June and kind of make EV manufacturer, we need to focus on continue.
Food innovation to build better quality and better performing vehicles at the same time, we I shouldn't be aligning our operations and managing costs carefully to support our revenue growth.
Learning: Progress towards profitability to support our Asia growth, we plan to strategically deploy capital into three new security plans that are scheduled to begin operation in 2025 further sharpening our production flexibility.
Learning: Now, let me recap our 2024 performance revenue for the Q4 2024 was 678 million U S dollar up by three 4% quarter over quarter and 17% year over year full.
Learning: Full year revenue was $1 8 billion U S dollar increased by 58% year over year.
Learning: Cost of goods. So in Q4, 2024 was $1 2 billion U S dollar increased by 93% quarter over quarter as follows ramped up significantly.
Learning: Cost of goods. So we're $2 8 billion U S dollar, which increased by 67% versus 2023.
Learning: Q4, 2024 gross margin was minus 79% versus mined at 24% in Q3.
Learning: The pressure on this quarter's gross margin was due to an accounting charge that we booked in relation to the free shopping for rent in Vietnam.
Learning: Mr Farm is responsible for paying the cost to implement the program.
Learning: For the Evs sold on or before December 31st 2024.
Learning: We estimate that amount to be paid it rightly bind with the fun for the entire retracting period is approximately 242 million U S. Dollar.
Learning: This amount is recognized as a revenue deduction and nadeem to contribution to the owner in our financial statements for fiscal year 2024.
Learning: Therefore, we need to book and attachment on revenue corresponding to the traveling benefits of own EV. So on or before December 31st 2024, if you remove the impact of the free trial program and Abbvie Q4, 2024 gross profit margin was.
Learning: Flat quarter over quarter and saw an improvement from minus 35% from a year prior to minus 26%.
Learning: 2020 for gross margin loss was minus 57% compared to the minus 49% in 2023.
Learning: Again, if we adjust for the impact of the free trial program and an IV full year gross loss margin saw an improvement from minus 40% in 2023 to minus 32% in 2024.
Learning: To elaborate on improve efficiency in Q4 2024, we continued to see our average unit volume and production costs for EV declined by 16% and 43% respectively.
Learning: For 2020 for every unit born and production costs for EV declined by 34% and 50% year over year, respectively.
Learning: Some of our high voltage models, it excluding and Avi depreciation and amortization and free shopping is basis and now achieving positive gross profit, reflecting the benefits of scale and Bob optimization.
Learning: Moving to operating expenses Q.
Learning: Q4, 2020 for SG&A expense was 268 million U S dollar.
Learning: By 89% quarter over quarter.
Learning: <unk> hundred and 8% year over year.
Learning: For the full year 2024, SG&A was 694 million U S dollar.
Learning: By 50% year over year.
Learning: The increase in SG&A compared to Q3 is primarily attributable to our efforts to scale, our sales operation globally, and the impairment charge to battery production lines due to business adjustments.
Learning: If you exclude the impact of the impairments and some one off items. During Q4 2020 for SG&A as a percentage of revenue declined to 19% from 26% in Q3.
For the R&D Q4, 2020 for R&D spend was 110 million, yes, tilda up by 28% quarter over quarter and decreased by 15% year over year.
Learning: For the full year 2020 for R&D spend was 412 million U S dollar decreased by 35% year over year.
Learning: The decrease over the Q4 2023 was primarily due to the reduction in engineering and development costs.
Learning: We completed the majority of the product development work in our existing models.
Learning: The increase over the Q3 2024 was primarily due to the introduction of the existing model a two for your market.
Learning: Well EBITDA and bottom line Q4, 2024, EBITDA loss is my net 928 million U S dollar.
Learning: The EBITDA losses are widened in line with the increased sales volume in Q4 2024.
Learning: Full year 2024, net loss was minus three 2 billion U S dollar.
Learning: The impact of HIV program, and Avi and impairment of assets net loss margin improved to minus 128% in 2024 from minus 203% in 2023.
Learning: Cashman Q4, 2020 for Capex is at 251 million U S dollar, 93% higher than Q3 due to capex on our facilities.
Learning: However, full year Capex was 686 million U S dollar, which decreased by 32% year over year.
Learning: Our cash burn significantly improved in 2024 decreased by 39% year over year to $1 9 billion U S dollar, reflecting our discipline in cost and capital management.
Learning: Among which cash burn from operating activities was only $1 25 billion U S dollar compared to $2 1 billion U S. Dollar in 2023.
When it comes to quality of cash flows management, our cash burn in 2024 equivalent 284% of revenue compared to 267% in 2023.
Learning: As stated earlier, we expect to continue investing in R&D and Capex in 2025, as we continue to improve customer experience and innovation. This will be partially offset by cost savings in other areas at the same time, we will continue making progress towards <unk>.
Learning: It's the ability by killing our top line growth and further cost savings.
Learning: Our liquidity position last November we announced a capital support package from our father and meet the fun and then go through a combination of grants and loans.
Learning: By 31st of December 2024, we had received approximately 800 million U S. Dollar advisory first of March 2025, total disbursements has exceeded $1 5 billion U S dollar strengthening our balance sheet and runway.
Learning: In addition to the commitments disparate from at the farm and <unk> been fast has access to nearly 1 billion U S dollar of liquidity, including an Ela facility.
Learning: As of 31st of March 2025 been fast liquidity position stood at approximately 3 billion U S. Dollar. This include a 968 million U S dollar facility.
Learning: One 9 billion U S dollar in funding from our father and loans from Zynga.
Learning: While we continue to be supported by our founder and corporate parent we are emulating capital markets opportunities to diversify our funding sources.
Learning: Luckily and update on the profitability perspective, 2024 marked a meaningful progress in our skilled and journey and operational discipline. In 2025, we are focused on scaling volume through new products launch and deepening our market presence in Asia.
Learning: Yeah.
Learning: At the same time, we are executing against clear levels for bomb optimization manufacturing efficiency and sharp as a capital deployment to drive margin improvement and move towards full year EBITDA profitability.
Learning: Operator, let's now open for Q&A.
Learning: Thank you.
Learning: As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.
Learning: I really ask you to limit yourselves to one question and one follow up question.
Learning: We will now take the first question.
Speaker Change: From the line of Undress ship part from Cantor Fitzgerald. Please go ahead.
Learning: Okay.
Speaker Change: Hi, everyone good morning, or good evening.
Speaker Change: Thank you so much for taking our questions and congratulations on the.
Speaker Change: <unk>.
Speaker Change: Hum.
Speaker Change: First question is.
Speaker Change: You're reaffirming your guidance for 2025 for now.
Speaker Change: I guess, what gives you confidence in your guidance. So far just given all of the macro conditions and how should we think about deliveries for for 'twenty. Five in terms of you know Vietnam versus other markets like India, Indonesia, what kind of break down should we be thinking.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Hi, Andrew how are you doing.
Speaker Change: <unk>.
Speaker Change: I think thank you for the question so.
Speaker Change: In terms of the confidence for the for the guidance.
Speaker Change:
Speaker Change: Very similar to 2020 for you.
Speaker Change: That Q1 is going to be the slowest quarter.
Speaker Change: We are now it's about 35000 deliveries in Vietnam in Q1.
Speaker Change: Then we expect some uptick in Q2.
Speaker Change: As two of the new Green models and start delivering.
Speaker Change: Towards the end of the quarter and then.
Speaker Change: The bulk of the 45000 Green Noncancelable preorders that we just received is that hitting in the second half of the year.
Speaker Change: So really we think that the first half.
Speaker Change: Contribution would be opposed to make to the 25, 30%.
Speaker Change: And then you will see most of the.
Speaker Change: The rest of the deliveries in the second half of the year with Q4 again being the strongest quarter.
Speaker Change: So.
Speaker Change: We we see them.
Speaker Change: Good result from the orders for the Green a series in 2025.
Speaker Change: And.
Speaker Change: In the first quarter this year, we already we.
Speaker Change: We already exceeded the first half of last year, and we continue building the momentum in them.
Speaker Change: And in Vietnam and in <unk>.
Speaker Change: In other markets.
So.
Speaker Change: Basically I mean looking at Vietnam.
Speaker Change: And other market, we have confidence that we should be.
Speaker Change: Able to deliver.
Speaker Change: At least a double of what we did last year.
Speaker Change:
Speaker Change: In terms of.
Speaker Change: The BRIC a breakdown between Vietnam and other markets, we expect the other markets will contribute more than more than 10%.
Speaker Change: Similarly to last year.
Speaker Change:
Speaker Change: Yeah, So yeah, so Vietnam, Indonesia, and we expect Indonesia, Asia market, Indonesia, Philippines and.
Speaker Change: India will contribute.
Speaker Change: Quite significantly this year.
Speaker Change: Yes.
Speaker Change: Wonderful.
Speaker Change: That's super helpful and Super four or really appreciated just one last question just on the.
Speaker Change: Gross margins can you remind us the path to positive gross margin. It seems like you know more sales for this year will probably be there'll be a three and five again, so with lower Asp's you know how should we think about the.
Speaker Change: Positive gross margins. Thank you.
Speaker Change: Yes, absolutely yes.
Speaker Change: Sure.
Speaker Change: As for the profit margin actually 2024 week, Mark significant progress in our scale sharp execution.
Speaker Change: And it's an encouragement to the our path to profitability.
Speaker Change: But also ended the year rich strong momentum.
Speaker Change: More like a tab for quarterly revenue year over year.
Speaker Change: So excluding the Niv and are now accounting charges, we have.
Speaker Change: Narrowed our full year gross loss margin to them.
Speaker Change: Minus 32% from minus 40% in 'twenty.
Speaker Change: <unk> 23.
Speaker Change: So in 2025.
Speaker Change: We are focused on the scaling volume through the new product launches and deepening our market presents in Asia.
Speaker Change: And at the same time that we we are executing against a clear levels for farm optimization manufacturing efficiency and in charter.
Speaker Change: <unk> filings.
Speaker Change: Drive our margin improvement and move to what their full year EBITDA profitability.
Speaker Change: Yep.
Speaker Change: Yeah.
Speaker Change: Perfect. Thank you so much of a game and a congratulations on the quarter I'll pass it on.
Speaker Change: Thank you.
Speaker Change: Cute.
Speaker Change: We will now take the next question.
Greg Lewis: From the line of Greg Lewis from <unk> LLC. Please go ahead.
Speaker Change: Alright, Thank you and good evening and good afternoon, good morning, everybody.
Greg Lewis: I was hoping to.
Greg Lewis: Understand a little bit better the.
Greg Lewis: The accounting treatment.
Greg Lewis: You're realizing the.
Greg Lewis: It'd be charging credit.
Greg Lewis: Hum.
Greg Lewis: Sounds good.
Greg Lewis: If you could just walk us through like how much we realize at the point of sale and then is that something that since the charges in place for a couple of years it's realized.
Greg Lewis: Over the life of the Oh.
Over the three year window.
Greg Lewis: So for the free charging a program actually.
Greg Lewis: During the Q4 2024, we have the one time charge was recognized in Q4 to account for the pre traveling.
Greg Lewis: <unk> expenses for the all the EV that we sold.
Greg Lewis: All of these for the 30 <unk> December 2024, so you can see.
Greg Lewis: We recognized two.
Greg Lewis: 242 million U S dollar did actually kind of the deduction in the revenue.
Greg Lewis: In line with the U S. Gulf are accounting treatment that we need to deduct to the revenue and.
Greg Lewis: Because Mr. Fong, our powder is responsible for this.
Greg Lewis: These are charging the span, but we increased for the <unk> contribution from the shareholder.
Greg Lewis: So that's why you you'll see the one time check a bigger amount in the Q4 2024.
Greg Lewis: Going forward what is it expected that these call it can be recognized along with the corresponding the vehicle sales for the duration of therapy driving a program that we are free to customer.
Greg Lewis: The currently under the our sales policy other fee charging program Gonna be ended on 30 <unk> of December of 2027.
Greg Lewis: Okay.
Greg Lewis: Okay, Great and then.
Greg Lewis: When we think about Sps and mix.
Greg Lewis:
Greg Lewis: I mean, I guess, the focus is going to be on <unk>.
Greg Lewis: Three in five so.
Greg Lewis:
Greg Lewis: How should we think about asps.
Greg Lewis: Asps trending.
Greg Lewis: Yes.
Speaker Change: And then Tony you know for the rest of the year Howard how are you guys thinking about back on pricing.
Speaker Change: Yes, yes.
Speaker Change: You are correct that actually with the increasing of the VX three via five heavily into our mix in Q4. So ISP is around 60.
Speaker Change: Towers in the U S. Dollar per car is average kind of the average in Q4 compared to the around 27.
Speaker Change: 700 U S dollar in Q3.
Speaker Change: Elaborate or the decline of the over 22%.
Speaker Change: So, although the driven primarily by the three five.
Speaker Change: Overall in 2020 for the ISP is around 19000.
Speaker Change: 300.
Speaker Change: Her car.
Speaker Change: I expect that we see the ASB in the low range during the early adoption stage away a customer tend to prefer small car.
Speaker Change: Low price tag to explore and experience.
Speaker Change: However, the ASE is only one part of the equation and the other part is unit growth there.
Speaker Change: Our objective to introduce more affordable models.
Speaker Change: If you capture possibly underserved cohort is it consumer and that's the prioritized value in both dollar terms and also the.
Speaker Change: The environment impact us.
Speaker Change: So uhm.
Speaker Change: Ultimately strong unit growth should offset the ASPD climbed and lead to sustainable revenue growth.
Speaker Change: Super helpful. Thank you for taking my questions.
Speaker Change: Thank you.
Speaker Change: We will now take the next question.
Speaker Change: From the line of James much read from Chardan capital markets. Please go ahead.
Speaker Change: Yes. Thank you.
Speaker Change: When we look at capital spending for 2025 and 2026.
Speaker Change: Alright, the amounts that you've budgeted similar to what you spent in 2024 or.
Speaker Change: Significantly higher or lower.
Speaker Change: So.
Speaker Change: You referred to the investment so we can like them and so in our cash flow.
Speaker Change: I I just.
Speaker Change: Like a hefty number that's in 2024, we have the cash burn one 9 million U S dollar.
Speaker Change: And so we expect that 8025 are approximately around $2 5 billion U S dollar.
Speaker Change: All of that we expect to spend $1 8 billion for the Capex and R&D I'm in the.
Speaker Change: Capex is for our <unk> facilities across Asia, and we are in.
Speaker Change: But to be operational in 2025.
Speaker Change: And.
Speaker Change: For the R&D around most capex and Opex is around 700 or 750.
Speaker Change: Million U S dollar.
Speaker Change: So the test burn from operations.
Speaker Change: Reducing them.
Speaker Change: E the cash burn for the.
Speaker Change: Operation is around $800 million to $900 million.
Speaker Change: Yeah slide.
Speaker Change: Slightly reduced versus last year.
Speaker Change: Yeah.
Thank you and secondly.
Speaker Change: When we evaluate the share of sales coming from the.
Speaker Change: <unk> five in 2025.
Speaker Change: Is that going to be approximately similar to what it was in Q4 of 2024.
Speaker Change: Okay.
Speaker Change: Please stand by your conference will resume shortly.
Speaker Change: And I'll try to do that.
Speaker Change: Thing is less than 50% because we have there.
Speaker Change: Coming in asthma.
Speaker Change: Yeah.
Speaker Change: Two less in Q4 last year.
Speaker Change: Thanks.
Speaker Change: Yeah.
Speaker Change: Okay, if I hate to do this to you, but the conference.
Speaker Change: Blanked out for during your answer so if you can just answer your answer I'm, sorry about that the percentage of the <unk> three and <unk> five.
Speaker Change: This year is expected to be less than.
Speaker Change: 50% and less which is less than.
Speaker Change: Q4 last year.
Speaker Change: But we also.
Speaker Change: We are adding the green series this year, so that would account for.
Speaker Change:
Speaker Change: Almost a quarter of the.
Speaker Change: Deliveries for this year as well.
Speaker Change: Okay.
Speaker Change: Very good thank you so much.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you there are no further questions from the phone at this time I would like to hand over for any webcast questions now.
Speaker Change: Thank you operator, and thank you Madam. Please go ahead.
Speaker Change: We have the first question from the webcast.
Speaker Change: With the target to at least double.
Speaker Change: Volume in 2025.
Speaker Change: What percentage do you expect international markets to contribute I think we have already addressed this so let's move on to the next one.
Speaker Change: Yeah.
Speaker Change: With the recent announcement of shifting focus and not boosting U S Canada Europe sale.
Speaker Change: What does that mean to the current owners dealerships and service centers.
Speaker Change: What is the update on the routine NHTSA investigation.
Speaker Change: Okay.
Speaker Change: Okay. Let me ticket. So the first question is about.
Speaker Change:
Speaker Change: The reaction to the U.
Speaker Change: U S, Canada and Europe.
Speaker Change: So all of our dealers in the market. The main strategic partners and continue to play a vital role in our growth and market execution.
Speaker Change: All the markets, we are transitioning toward a dealership model.
Speaker Change: To enhance the efficiency and scale.
Speaker Change: This shift enables cost optimization.
Speaker Change: While expanding our reach faster, particularly particularly in the high potential reason why demand pipeline remains strong.
Speaker Change: So.
Speaker Change: While the recent headlines have prompted increased caution among some of the dealers in a sense.
Speaker Change: Sentiment remains quite constructive in Asian market as we bill.
Speaker Change: Brand momentum.
Speaker Change: We have proactively align supply with demand.
Speaker Change: Accelerating shipments ahead of tariff implementation in the U S to ensure.
Speaker Change: Ah <unk> deliveries well position to the summer season as well.
Speaker Change: So so far so good and we manage the relationship.
Speaker Change: While with the strategic partners.
Speaker Change: On your second question about the.
Speaker Change: Mr Beauty investigation.
Speaker Change:
Speaker Change: So.
Speaker Change: As we have repeated many times safety is an important aspect to us and we are cooperating with the investigation by nature as we have always been in the past Michelle.
Speaker Change: <unk> generally that does not close this type of investigation.
Speaker Change: Hum.
Speaker Change: They take no further action so long in fact continue to honor his commitment in terms of the settlement so.
Speaker Change: We continue cooperating with them so far no.
Speaker Change: No feedback for.
Speaker Change: For the past few months.
Speaker Change: Yeah.
Speaker Change: Thank you Matt I'm, sorry, we have the next question from the floor what is the current status.
Speaker Change: And project plans for the U S. A manufacturing plant in North Carolina.
Speaker Change: Thank you.
Speaker Change: So the U S remains one of our key markets and.
Speaker Change: We are committed to it for the long term.
Speaker Change: This is reflected in the fact that we have made no changes to our plan to happen.
Speaker Change: Our North Carolina facility by 2028.
Speaker Change: We will continue monitoring the macroeconomic and geopolitical developments and devised a plan if needed.
Speaker Change: With the current market backdrop has also provided us with an appropriate we don't adjust our execution focus so we.
Speaker Change: We are also focused on fostering.
Speaker Change: Fostering dealers performance and also expanding our dealer pipeline across the U S.
Speaker Change: With our dealers for their cooperation and support and continue to have meaningful dialogues as we work together through the macro uncertainty.
Speaker Change: Sure.
Speaker Change: We will take them for that.
Speaker Change: Okay.
Speaker Change: Thank you <unk>, we have the next question from the floor.
Speaker Change: How is the expansion into Indonesia, and the Philippines.
Speaker Change: Resting.
Speaker Change:
Speaker Change: Well for both markets.
Speaker Change: We.
Speaker Change: We actually are very very pleased with the with the progress in both markets for Indonesia.
Speaker Change: We started delivery via three BSI and via E 34.
Speaker Change: We have about will deliver about 3000 of USD 34 GSA.
Speaker Change: And about 500 vehicles.
Speaker Change: To see customers in the market.
Speaker Change: Indonesia is the.
Speaker Change: The first real fast overseas market outside of Vietnam.
Speaker Change: Where we implement the whole full green mobility ecosystem.
Speaker Change: Which means the GSM for the Green Tech Z N V Green for charging station.
Speaker Change: <unk>.
Speaker Change: GSM in together.
Speaker Change:
Speaker Change: Lastly, and Atlassian and.
Speaker Change: We.
Speaker Change: We started our spending the V green charging network in.
Speaker Change: Indonesia.
Speaker Change: Our dealership network consisted of 22 showrooms as of March 31, 2025, and we are on track with our target to have about 80. So by the end of the year as we continue expanding our relationship with the dealers.
Speaker Change: About Philippines, we have introduced five models in the Philippines with the via the being the latest one could be introduced.
Speaker Change: We.
Speaker Change: We also started expanding our dealership network.
Speaker Change: And so the center, we have fixed showrooms by the end of March and interact city showroom by the end of the year.
Speaker Change:
Speaker Change: And we.
Speaker Change: The green the testing.
Speaker Change: The station network is already present in the Philippines.
Speaker Change: And we expect to see a GSM.
Speaker Change: Taxi in the Philippines.
Speaker Change: Okay.
Speaker Change: Thank you Matt MTV.
Speaker Change: We have the next question is about tariffs.
Speaker Change: What is your view on the potential impact of the new U S tariff on consumer cost spending both in Vietnam and in your key international markets.
Speaker Change: It's been fast.
Speaker Change: Preparing to respond for each market and what forms of government support are you expecting.
Speaker Change: The government support.
Speaker Change: Emma.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Is from the analysts in Vietnam.
Speaker Change: Okay. So I guess the tariff policy broker Terry is here.
Speaker Change: Most popular keywords these days.
Speaker Change: <unk>.
Speaker Change: We.
Speaker Change: We are closely monitoring and believe that at this stage it remains premature to determine the final trajectory of the tariff.
Speaker Change: Further developments and influencing factor.
Speaker Change: To unfold.
We have proactively brought in inventory model year, 'twenty five vehicles to North America.
Speaker Change: Which unaffected by the new tariffs and we have sufficient.
Speaker Change: Inventory in the interim.
Speaker Change: In 2020 for the U S accounted for only 4% of total deliveries and so we believe that the impact of the U S tariff on.
Speaker Change: On automotive I mean, we impacted only by automotive.
Speaker Change: Tariff for now not the Super Cohen.
Speaker Change: So we expect that the impact of the U S automotive tariffs on us is less this year compared to other OEM.
Speaker Change: We rely on the U S market.
Speaker Change: Our 2025 guidance announced in February or into into account potential political and economic uncertainty in the U S and it is important to highlight that the majority of our growth in 2025 is expected to be from non U S market.
Speaker Change:
Speaker Change: We.
Speaker Change: We will not.
Speaker Change: Don't expect.
Speaker Change: Our government support.
Speaker Change: In Vietnam, even though we are in Vietnam, we do have like some waiver of some registration G but.
Speaker Change: We are.
Speaker Change: We don't expect.
Speaker Change: This is not in our projections to have any government support.
Speaker Change: Any meaningful way.
Speaker Change: Okay.
Speaker Change: Thank you <unk>.
Speaker Change: We have the next question is from the line.
Speaker Change: In the past many first and talk about battery leasing SCS unique differ.
Speaker Change: Differentiator of beer market entry can you explain the rationale to discontinue is offered.
Speaker Change: Okay am I talk about it a little bit in my earlier speech.
Speaker Change: So mercury leasing play a vital a level in the early days of easy adoption as it really had narrowed the price gap between internal combustion engine vehicles and Evs.
Speaker Change: But as the consumer from the literature.
Speaker Change: With Evs grow battery leasing as a percentage of sales.
Speaker Change: Has dropped from 80% at the beginning to about 30% below 30%.
Speaker Change: Recently.
Speaker Change: So.
Speaker Change: It's just.
Speaker Change: Is the right time for us to.
Speaker Change: To drop the battery leasing and to ease the transition.
Speaker Change: We extend our extended free trials and benefits to.
Speaker Change: The customer says six months for easy owners and one year of E scooter owners through 2027.
Speaker Change: Thank you <unk>.
Speaker Change: We have the last question from the line.
Speaker Change: Can you remind us what are <unk> key priorities for 2025, and how that aligns with lower go to market strategy and what are you. Most excited about for reinsurance over the next 24 months.
Speaker Change: Thank you.
Speaker Change: The priorities for us in 2025.
Speaker Change: Well first of all solidifying the leadership position in Vietnam.
Speaker Change: And continuing to build brand awareness and strengthening performance and presence in new markets.
Speaker Change: Secondly to.
Speaker Change: Employ enhance capex manufacturing to support business growth, we opening three more factory this year and then finally <unk>.
Speaker Change: Driving product innovation through our segmentation and again focus on cost optimization.
Speaker Change: So our go to market strategies built around three pillars our products are.
Speaker Change: Our manufacturing capacity.
Speaker Change: Capacity and market rich and we are under an NDA.
Speaker Change: These are all aligned with our 2025 priorities and long term goals.
Speaker Change:
Speaker Change: What excites.
Speaker Change: Exciting about them.
Speaker Change: Exciting development has been faster than our engineering fun, we wouldn't be launching new vehicle platforms. This year.
Speaker Change: To simplify and increase our platform commonality across the model.
Speaker Change: So this win into a little more cost savings.
Speaker Change: And we are also working hard on new technologies and will share more details with you later.
Speaker Change: So all in all the path ahead of us is very clear.
Speaker Change: I'm very excited about the future of interest.
Speaker Change: Thank you Monte I think we are coming up to the one hour Mark and thank you everyone again for joining us today.
Speaker Change: Do you need any further clarification. Please let us know by sending an email to IR at <unk> Dot com.
Speaker Change: Goodbye.
Speaker Change: Thank you.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
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