Q1 2025 VinFast Auto Ltd Earnings Call
Operator: Good day and thank you for standing by.
Good day and thank you for standing by welcome to obtain cost Q1, 'twenty financial results. Thank you Tom.
Operator: Welcome to VinFast Q1 2035 Financial Results and Q&A webcast. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star 1 1 on your telephone. You will then get an automatic message arriving your hand which way. You can also submit your questions via the webcast. Please be advised that today's conference is being recorded.
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Amanda Bay: I would now like to hand the call over to Amanda Bay, VP of Investor Relations. Thank you. Please go ahead. Thank you, operator. And good morning, everyone. This is Amanda Bay, Vice President of Investor Relations.
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Speaker Change: Thank you. Please go ahead.
Thank you operator, and good morning, everyone.
Speaker Change: This is Amanda Bay, Vice President of Investor Relations welcome.
Unknown Executive: Welcome to VinFast First Quarter 2025 Earnings Conference.
Speaker Change: Welcome to Vince Foster first quarter 2025 earnings conference call.
Amanda Bay: Joining me today are Chairwoman of the Board, Madam Thuy Le, and our CFO, Ms. Lana Nguyen. Before I turn the call over to Madam Thuy, let me remind you that some of the statements on this call include forward-looking statements under federal securities law. These include, without limitation, statements regarding the future financial and operating outlook, guidance, macroeconomics, industry trends, company initiatives, and other future events. These statements are based on the predictions and expectations as of today. Actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the U.S.
Speaker Change: Joining me today are chairwoman of the board.
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Speaker Change: Before I turn the call over to Matt I'm, Sorry, Let me remind you that some of the statements on this call include forward looking statements under Federal Securities Law.
Speaker Change: These include without limitation statements regarding the future financial and operating outlook Guy.
Speaker Change: Items macroeconomics industry trends company initiatives and other future events.
Speaker Change: These statements are based on our predictions and expectations as of today.
Speaker Change: Actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the U S Securities and Exchange Commission.
Unknown Executive: Securities and Exchange Commission.
Amanda Bay: In addition, management will refer to non-GAAP financials during this call. A discussion of why we use non-GAAP and the information regarding the reconciliation of our non-GAAP versus GAAP financials is available in the press release that we issued this morning.
Speaker Change: In addition management will refer to non-GAAP financials during this call.
Speaker Change: Discussion of why we use non-GAAP information regarding the reconciliation of our non-GAAP versus GAAP financials is available in the press release that we issued this morning.
Thuy Le: With that, I would like to invite Madam Thuy to start with the management remarks. Thank you, Amanda, and hello everyone. I appreciate you joining us today. I am pleased with the progress made over the past year. Given that the first quarter is typically the slowest seasonally, it is encouraging to see signs of improved operating leverage driven by economies of scale. Compared to the same period last year, our volume growth and streamlined operational footprint are increasingly reflected in a more efficient cost structure, and subsequently the narrowing of our profit margins year over year.
Speaker Change: That I would like to invite Madam Sui to start with the management remarks.
Sui: Thank you Amanda and Hello, everyone. I appreciate you joining us today I am pleased with the progress made over the past year given that the first quarter is typically the slowest seasonally it is encouraging to see signs of improved operating leverage driven by economies of scale compared to the same period last year, our volume growth.
Speaker Change: Streamlines operational footprint are increasingly reflected in a more efficient cost structure and subsequently the narrowing of our profit margins year over year today I'll be sharing updates on three key fronts, one deliveries performance to the pace of EV adoption and performance in our key markets and lastly, a few.
Thuy Le: Today, I'll be sharing updates on three key fronts. One, deliveries performance. Two, the pace of EV adoption and performance in our key markets. And lastly, our future R&D roadmap that we mentioned last quarter. On the deliveries front, I'm pleased to share that Q125 deliveries alone have already exceeded our total for the first half of last year. Achieving this in the typically slowest quarter of the year marks an encouraging start to 2025, especially given ongoing global macroeconomic and trade uncertainty. In Q1 2025, VinFast delivered 36,330 electric vehicles, representing a 296% increase year-over-year and a 32% decline quarter-over-quarter.
Speaker Change: R&D roadmap that we mentioned last quarter.
Speaker Change: The deliveries front I'm pleased to share that Q1, 'twenty five deliveries alone have already exceeded our total for the first half of last year.
Speaker Change: Achieving this in the typically slowest quarter of the year marks an encouraging start to 2025, especially given ongoing global macroeconomic and trade uncertainties.
Speaker Change: In Q1, 2025 been fast delivered 36330 electric vehicles, representing a 296% increase year over year, and a 32% declined quarter over quarter. It is important to remember that Q1 is typically our seasonally slowest quarter, primarily due to.
Thuy Le: It's important to remember that Q1 is typically our seasonally slowest quarter, primarily due to the extended Lunar New Year holiday in Vietnam. On the two-wheeler front, we delivered 44,904 units, marking a 473% year-over-year increase and a 44% rise quarter-over-quarter. This strong growth was driven by the expansion of our dealer network in Vietnam and a sharpened product focus following the discontinuation of older models in favor of more competitive offerings. Deliveries to related parties, which include GSM, the EV taxi platform owned by our founder, accounted for 21% of Q1 deliveries. With this, our B2C deliveries have consistently accounted for over 70% of total sales for three consecutive quarters through Q1 2015.
Speaker Change: The extended lunar new year holiday in Vietnam on the two Wheeler front, we delivered 44904 units, marking a 473% year over year increase and a 44% rise quarter over quarter. This strong growth was driven by the expansion of our dealer network in Vietnam, and a sharpened product focus.
Speaker Change: Following the discontinuation of older models in favor of more competitive offerings.
Speaker Change: Deliveries to related parties, which include G. S M. The EV taxi platform owned by our founder accounted for 21% of Q1 deliveries with this our b to C deliveries have consistently accounted for over 70% of total sales for three consecutive quarters through Q1 25.
Thuy Le: As GSM expands in Indonesia and the Philippines, we anticipate continued vehicle deliveries to support their fleet growth.
Speaker Change: As GSM expands in Indonesia, and the Philippines, We anticipate continued vehicle deliveries to support their fleet growth.
Thuy Le: Charging infrastructure remains the biggest barrier to EV adoption. Our charging partner, VGreen, is actively addressing this challenge by working with local businesses to roll out exclusive charging networks for VinFast customers. GSM and VGreen together has normalized EV usage in Vietnam, and we believe their international expansion as part of our ecosystem approach will help drive a similar trajectory of consumer adoption in other markets.
Speaker Change: Charging infrastructure remains the biggest barrier to EV adoption are charging partner V. Green is actively addressing this challenge by working with local businesses to rollout exclusive charging networks 14 fast customers G. S. M. N V. Green together has normalized EV usage in Vietnam, and we believe that international expansion.
Speaker Change: As part of our ecosystem approach will help drive a similar trajectory of consumer adoption in other markets.
Thuy Le: Let me now walk you through the pace in EV adoption and performance in our current market. Across our key markets, EV adoption continues to gain traction at different speeds, supported by varying degrees of regulatory incentives and a broader range of product offerings for consumers. In Southeast Asia, unlike Vietnam, where VinFast has driven EV penetration to nearly 40% in Q1, battery EV or BEV adoption is still nascent in other regional markets. In Indonesia, according to Gaikindo data, BEVs made up 7% of total auto sales in Q1, up from 3% a year ago. In the Philippines, data from Campi showed that BEVs accounted for only 3% of total auto sales.
Speaker Change: Let me now walk you through the pace in EV adoption and performance in our current markets.
Speaker Change: Across our key markets EV adoption continues to gain traction at different speeds supported by varying degrees of regulatory incentives and a broader range of product offerings for consumers in southeast Asia, Unlike Vietnam, where linzess has driven EV penetration to nearly 40% in Q1 battery EV or.
Speaker Change: <unk> adoption is still nascent in other regional markets in Indonesia. According to Guy can do data Bv's made up 7% of total auto sales in Q1 up from 3% a year ago in.
Speaker Change: In the Philippines data from Tempe showed that BV is accounted for only 3% of total auto sales.
Thuy Le: For VinFast in Indonesia, we've made meaningful progress in establishing a strong foundation for long-term growth in the first quarter of the year. We launched the VF3 for sale in February and began deliveries in March. In a market where consumers are spoiled for choice, our industry-leading offering, including one year of free charging, has started to differentiate VinFast. Today we have four models available in Indonesia, with the VF7 and Green Series expected to launch soon, further broadening our portfolio. We are rapidly scaling our retail and service footprint. To support this growth, we have announced a strategic partnership with a respected distributor with a proven track record representing legacy automotive brands.
Speaker Change: For Finfet in Indonesia, we've made meaningful progress in establishing a strong foundation for long term growth in the first quarter of the year.
Speaker Change: We launched the V F. Three for sale in February and began deliveries in March.
Speaker Change: The market, where consumers are spoiled for choice, our industry, leading offering including one year of free charging has started to differentiate been fast.
Speaker Change: Today, we have four models available in Indonesia, with the V F seven and Green series expected to launch soon further broadening our portfolio.
Speaker Change: We are rapidly scaling our retail and service footprint to support this growth, we have announced a strategic partnership with a respected distributor with a proven track record representing legacy automotive brands.
Thuy Le: Their alignment with a new entrant like VinFast underscores the long-term confidence in our value proposition for Indonesian consumers. Our green mobility ecosystem is taking shape with GSM expanding into additional major cities. GSM is already operating a fleet of 3,000 EVs in Greater Jakarta, accelerating consumer familiarity with our EVs. In parallel, VGreen Indonesia, our exclusive charging network operator, has deployed over 2,000 charging locations across 36 provinces out of 38 provinces in the country, with approximately 16% already operational. VGreen provides reliable infrastructure to support our growing customer base.
Speaker Change: Their alignment with the new entrant like Vince fast underscores the long term confidence in our value proposition for Indonesia, and consumers are green mobility ecosystem is taking shape with G S and expanding into additional major cities.
Speaker Change: DSM is already operating a fleet of 3000 Evs in greater Jakarta, accelerating consumer familiarity with our Evs.
Speaker Change: In parallel the Green, Indonesia, our exclusive charging network operator has deployed over 2000 charging locations across 36 provinces out of 38 provinces in the country with approximately 16% already operational V. Green provides reliable infrastructure to support our growing customer base.
Thuy Le: Next, the Philippines. Similar to our foundational work in Indonesia, we have announced partnerships to establish service workshops and dealerships. Our partners, VGreen and GSM, will play a key role. VGreen is setting up a dedicated EV charging network to support early adopters, while GSM will soon be launched in the Philippines. Our MOU with Goodyear Philippines includes a working relationship to open 50 authorized VinFast service workshops and an agreement with six established distributors announced at the Manila International Auto Show to open over 60 new showrooms in the Philippines this year.
Speaker Change: The Philippines.
Speaker Change: Similar to our foundational work in Indonesia, we have announced partnerships to establish service workshops and dealerships.
Speaker Change: Our partners V Green and GSM will play a key role V. Green is setting up a dedicated EV charging network to support early adopters, while GSM will soon be launched in the Philippines.
Speaker Change: Our Mou with Goodyear Philippines includes a working relationship to open 50 authorized Vince fast service workshops, and an agreement with six established distributors announced at the Manila International Auto show to open over 60, new showrooms in the Philippines. This year.
Thuy Le: Coming back to Vietnam, our core market. According to data from the Vietnam Automobile Manufacturers Association and other industry groups in the region, Vietnam led Southeast Asia in automotive sales growth with a 24% year-over-year increase, outpacing larger regional markets. This performance was underpinned by strong macro fundamentals. GDP growth accelerated to 6.9% in Q1, the highest since 2020. Based on Vietnam registration data, VinFast market share of overall auto sales increased to nearly 40% in Q1, 2025, from approximately 20% last year. This remarkable increase reflects the strong brand recognition we enjoy, which is further amplified by the entrenchment of our green mobility ecosystem.
Speaker Change: Coming back to Vietnam or core market. According to data from the Vietnam Automobile manufacturers Association and other industry groups in the region Vietnam led southeast Asia in automotive sales growth with a 24% year over year increase outpacing larger regional markets. This performance was underpinned by strong man.
Speaker Change: Crow fundamentals GDP growth accelerated to six 9% in Q1, the highest since 2020 based on Vietnam registration data when fast market share of overall auto sales increased to nearly 40% in Q1 2025 from approximately 20%.
Speaker Change: Last year.
Speaker Change: This remarkable increase reflects the strong brand recognition, we enjoy which is further amplified by the entrenchment of a green mobility ecosystem. The launch of the Green series opens a new market segment for then fast to maintain our industry leadership in our home market.
Thuy Le: The launch of the Green Series opens a new market segment for VinFast to maintain our industry leadership in our home market. In Vietnam, VinFast continued to be the proxy for EV penetration and led the auto market during Q1 2025 with over 35,100 vehicles delivered, equivalent to the next three players combined. Two of our top-selling models, the VF3 and VF5, were also best-selling passenger vehicle models in Vietnam during Q125 and accounted for 68% of VinFast's total domestic delivery. This was followed by the VF6, which has become the new popular mass premium car in Vietnam. It accounted for 12% of VinFast total domestic delivery.
Speaker Change: Vietnam, Vince that continued to be the proxy for EV penetration and led the auto market. During Q1 2025 with over 35100 vehicles delivered equivalent to the next three players combined.
Speaker Change: Two of our top selling models the V F. Three and five were also best selling passenger vehicle models in Vietnam. During Q1, 'twenty five and accounted for 68% of been fast total domestic deliveries.
Speaker Change: This was followed by the V F six which has become the new popular mass premium car in Vietnam. It accounted for 12% of Vince fast total domestic deliveries.
Thuy Le: At around $26,000, VF6 offers a modern design, with comfortable cabin and standout features that are rare to find in the BSUV segment, such as voice control, multi-link rear suspension, and adaptive cruise control. VF6 owners agree this model delivers a segment-up experience at a BSUV price. During the quarter, we began taking pre-orders for the Green Series, a dedicated lineup tailored for transportation use cases. Since its introduction in late 2024, the four-model EV series have attracted elevated interest from local taxi fleet operators who were starting their journey to electrification. More recently, we commenced our first deliveries of the Hario Green and Nario Green in April.
Speaker Change: At around $26000 vs. Six offers a modern design with comfortable cabin and stand out features that are rare to find in the <unk> segment, such as voice control multi link Ria suspension and adaptive cruise control V. F. Six owners agreed this model delivers a segment.
Speaker Change: <unk> at a b SUV price.
Speaker Change: During the quarter, we began taking preorders for the Green series, a dedicated lineup tailored for transportation use cases since its introduction in late 2020 for the for model N. V series have attracted elevated interest from local taxi fleet operators, who are starting their journey to electrification.
Speaker Change: More recently, we commenced our first deliveries of the Harrier Green and area of Green in April.
Thuy Le: We are also broadening our product lineup into commercial vehicles, with the introduction of an electric school bus and an electric minivan model in May.
Speaker Change: We are also broadening our product lineup into commercial vehicles with the introduction of an electric school bus and an electric minivan model in me outside of Vietnam, We are exploring opportunities in Asia, and Europe with plans to offer electric buses and six 810 and 12 meter sizes move.
Thuy Le: Outside of Vietnam, we are exploring opportunities in Asia and Europe, with plans to offer electric buses in 6, 8, 10, and 12 meter sizes. Moving on to India, we are pleased to announce the opening of our CKD factory in Tamil Nadu in July. We will soon announce our dealer partners and ahead of the sales opening for VF6 and VF7, we plan to launch extensive marketing campaigns in Delhi and Mumbai to build brand awareness. With India's EV market still in its early stage and significant white space across segments, we see a compelling opportunity to deliver premium value and accessible innovation to Indian consumers.
Speaker Change: Moving on to India. We are pleased to announce the opening of our CK D factory in time, you will not do in July.
Speaker Change: We will soon announce our dealer partners and ahead of the sales opening for V. F. N. B S. Seven we plan to launch extensive marketing campaigns in Delhi, and Mumbai to build brand awareness.
Speaker Change: With India's EV market is still in its early stage and significant white space across segments, we see a compelling opportunity to deliver premium value and accessible innovation to Indian consumers.
Thuy Le: In Europe and North America, as part of our ongoing strategic initiative to optimize our footprint, VinFast will close its direct-to-consumer showrooms in Germany and the Netherlands in June and start replacing them with new dealers showrooms. This is a long-term strategy that VinFast initiated to transition from purely direct-to-consumer to a more dealer-led distribution model. Our transfer of all showrooms in Vietnam last year to our dealer partners was a prime example. To ensure seamless services to our customers, we have recently signed dealership agreements with dealers in France and Germany. In the Netherlands, we announced partnerships with LKQ and DHL to deliver high-quality after-sales experience, including the delivery of spare parts within a day.
Speaker Change: In Europe, and North America, as part of our ongoing strategic initiative to optimize our footprint when first will close its direct to consumer showrooms in Germany, and the Netherlands in June and start replacing them with new dealer showrooms.
Speaker Change: This is a long term strategy that been fast initiated to transition from purely direct to consumer to have more dealer led to distribution model. Our transfer of all showrooms in Vietnam last year to our dealer partners was a Prime example to ensure seamless services to our customers. We have recently signed dealership agreements with dealers in France and Germany.
Speaker Change: In the Netherlands, we announced partnerships with LKQ and D. H L to deliver high quality after sales experience, including the delivery of spare parts within a day.
Thuy Le: Our commitment to fostering electric mobility in Europe remains unchanged, and the shift in our distribution model is set to improve our operational efficiency to address growing customer demand.
Speaker Change: Our commitment to fostering electric mobility in Europe remains unchanged.
Speaker Change: The shift in our distribution model is set to improve our operational efficiency to address growing customer demands.
Thuy Le: Looking over to Canada, we are closing three short-term shopping centre stores and two showrooms in outlying areas to refocus our resources to the best performing showrooms. As of April 30, 2025, we had 388 showrooms globally, of which over 90% were dealer stores.
Speaker Change: Looking over to Canada. We are closing three short term shopping center stores and two showrooms in outlying areas to refocus our resources to the best performing showrooms.
Speaker Change: As of April 30th 2025, we had 388 showrooms globally of which over 90% where dealer stores.
Thuy Le: Finally, I'd like to share some of the exciting innovations underway at VinFast as we develop our next generation of electric vehicles. As a young and dynamic EV manufacturer, we remain committed to delivering higher quality, better performing vehicles while keeping them accessible to a broad range of consumers. Our new platform and EE architecture will enable further build of material cost optimization, driving efficiency across every aspect of the business. Our first-generation vehicle platforms prioritize speed and market readiness, allowing us to bring seven models to market in under three years, effectively establishing VinFast as the EV brand for every customer's needs.
Speaker Change: Finally, I'd like to share some of the exciting innovations underway had been fast as we develop our next generation of electric vehicles.
Speaker Change: As a young and dynamic EV manufacturer, we remain committed to delivering higher quality better performing vehicles, while keeping them accessible to a broad range of consumers, our new platform and E architecture will enable further bill of material cost optimization driving efficiency across every aspect.
Speaker Change: Of the business.
Speaker Change: Our first generation vehicle platforms, prioritize speed and market readiness, allowing us to bring seven models to market in under three years effectively establishing being fast is the EV brand for every customer's needs.
Thuy Le: Looking ahead, our next generation vehicle architecture is guided by the principles of the three C's, competitiveness, commonality, and cost efficiencies. This strategic evolution underscores our sharpened focus on operational efficiency and scalability as we steer the company toward long-term profitability. Our new vehicle platforms will be designed to simplify the engineering process while integrating world-class technologies and supporting a wide range of product offerings. Each platform will underpin multiple models, significantly increasing component commonality. This approach enables more streamlined procurement and manufacturing processes, ultimately driving cost reductions through economies of scale and improved operational synergy. In parallel, VinFast's EE architecture is undergoing a major transition to its second phase of development, which introduces zonal architecture controlled by a centralized supercomputer.
Speaker Change: Looking ahead, our next generation vehicle architecture is guided by the principles of the three CS competitiveness commonality and cost efficiencies.
Speaker Change: This strategic evolution underscores our sharpened focus on operational efficiency and scalability as we steer the company towards long term profitability.
Speaker Change: Our new vehicle platforms will be designed to simplify the engineering process, while integrating world class technologies and supporting a wide range of product offerings. Each platform will underpin multiple models significantly increasing component commonality. This approach enables more streamline procurement and manufacturing process.
Speaker Change: Is ultimately driving cost reductions through economies of scale and improved operational synergy.
Speaker Change: In parallel Vince fast E architecture is undergoing a major transition to its second phase of development, which introduces zonal architecture controlled by a centralized supercomputer. This reduces E SKU complexity and minimizes the use of traditional wire harnesses further contributing to bill of.
Thuy Le: This reduces ECU complexity and minimizes the use of traditional wire harnesses, further contributing to Bill of Materials cost optimization and production efficiency. More importantly, this transition will also enhance customer experience. I'm pleased to share that the first model to debut with a next-generation platform and zonal E.E. architecture will be the new MPV model, Limo Green, going to market in Q3 this year. Various existing models will also undergo a technology refresh beginning in 2026 as we continue to elevate our product offering and deliver a smart, software-defined vehicle.
Speaker Change: <unk> cost optimization and production efficiency more importantly, this transition will also enhance customer experience.
Speaker Change: I'm pleased to share that the first model to debut with a next generation platform and zoned out E architecture will be the new MPV model, the more green going to market in quarter. Three this year various existing models will also undergo a technology refresh beginning in 2026, as we continue to elevate our product offering and deliver.
Speaker Change: Our smart software defined vehicle.
Anh Nguyen: I will now hand it over to our CFO to discuss the financial results. Thank you, Madam Thuy. Good morning, everyone. I'm pleased to walk you through our financial results for the first quarter of 2025. Our business is now at an inflection point where we expect economies of scale to drive greater operating leverage going forward. We've made meaningful progress in optimising our cost base both in terms of cost of goods sold and operating expenses. As we continue to grow our top line while streamlining our operational footprint, we remain focused on identifying additional cost-saving opportunities. As Madam Thuy noted, our new vehicle platforms and our new journal EE Architecture will serve as a foundation for longer term cost savings.
Speaker Change: I'll now hand, it over to our CFO to discuss the financial results.
CFO: Thank you Mike M T.
Speaker Change: Earning everyone at.
Speaker Change: I'm pleased to walk you through our financial results for the first quarter of 2025.
Speaker Change: Our business is now at an inflection point, where we expect economies of scale to drive greater operating leverage going forward.
Speaker Change: We've made meaningful progress in optimizing our cost base, both in terms of cost of goods sold and operating expenses.
Speaker Change: As we continue to grow our top line, while streamlining our operational footprint, we remain focused on identifying additional cost saving opportunities.
Speaker Change: It's Martin <unk> noted.
Speaker Change: Our new vehicle platforms, and a new genre E architecture with itself as a foundation for longer term cost savings.
Anh Nguyen: These changes not only reduce complexity and component redundancy but also enable us to secure more favourable supply contracts. Supported by Groww skill Our Bill of Materials Optimization Program is ongoing and we expect to see a more material impact once the new platforms are fully commercialized over the next 18 months.
Speaker Change: These changes not only reduce complexity and component redundancy, but also enable us to secure more favorable supply contracts.
Speaker Change: Supported by outgrow our scale.
Speaker Change: Our view up like carrier optimization program is ongoing and we expect to see a more material impact once the new platforms are fully commercialized over the next 18 months.
Anh Nguyen: Now, let me walk you through our results in more detail. Net revenue for Q1 2025 was US$657 million, an increase of 150% year-over-year, and largely in line with Q4 2024. Cost of goods sold for the quarter was US$888 million, an increase of 113% year-over-year, and down 25% quarter-over-quarter, reflecting the continued ramp-up in deliveries. Cost of goods sold as a percentage of revenue was 135% for the quarter, compared to 179% in Q4. and 159% from the year prior. Q1 2025 gross margin was minus 35%, a notable improvement from minus 59% in the same period last year.
Speaker Change: Now, let me walk you through our results in more detail.
Speaker Change: Net revenue for Q1, 2025 was 657 million U S dollar.
Speaker Change: An increase of 150% year over year and lastly in line with Q4 2024.
Speaker Change: Cost of goods sold for the quarter was 888 million U S dollar an increase of 113% year over year and.
Speaker Change: And down 25% quarter over quarter, reflecting the continued ramp up in deliveries.
Speaker Change: Cost of goods sold as a percentage of revenue was 135% for the quarter.
Speaker Change: <unk>, 279% in Q4.
Speaker Change: <unk> hundred 59% from the year prior.
Speaker Change: Q1, 2025 gross margin was minus 35%, but.
Speaker Change: A notable improvement from minus 59% in the same period last year.
Anh Nguyen: Driven by increased skill and ongoing cost optimization efforts. Excluding the impact of NRV and one of items Gross margin was minus 28% compared to minus 57% during the same period last year.
Speaker Change: Driven by increased scale and ongoing cost optimization efforts.
Speaker Change: Excluding the impact of MRV and one off items.
Speaker Change: Margin was minus 28% compared to minus 57% during the same period last year.
Anh Nguyen: Moving on to operating expenses. FG&A expenses for the quarter totaled US$161 million, representing a 23% increase year-over-year, but a 43% decline quarter-over-quarter. As a percentage of revenue, SG&A was 23%. significantly improving from 47% in the same period last year. This reduction reflects our ongoing shift from a direct-to-customer model to a dealer-based model, a transition that began in late 2023 and is helping streamline our cost structure. We recorded a US$20 million impairment charge this quarter, of which the majority was impairment charges related to the closure of existing D2C showrooms in California. We expect to incur additional impairment charges in the coming quarters as the transition progresses in the other markets.
Speaker Change: Moving on to operating expenses.
Speaker Change: SG&A expenses for the quarter totaled 151 million U S dollar, representing a 23% increase year over year, but a 43% decline quarter over quarter.
Speaker Change: As a percentage of revenue SG&A was 23%.
Speaker Change: He basically improving from 47% in the same period last year.
Speaker Change: This reduction reflects our ongoing stripped from a direct to customer model to a dealer based model.
Speaker Change: Physicians that began in late 2023, and these have been streamlined our cost structure.
Speaker Change: We recorded a 20 million U S dollar impairment charge this quarter.
Speaker Change: Which the majority was impairment charge related to the closure of exotic thing.
Speaker Change: To see showrooms in California.
Speaker Change: We expect to incur additional impairment charges in the coming quarters as the transition progresses in the other markets.
Anh Nguyen: R&D expenses came in at US$81 million, down 22% year-over-year, and 25% quarter-over-quarter. As a percentage of revenue, R&D was 12% compared to the 40% in the same quarter last year. While we saw a decline this quarter, we anticipate higher R&D spending in the coming periods as we invest in the development of our next generation's platforms and technologies. EBITDA for the first quarter of 2025 was minus US$396 million, with an EBITDA margin of minus 60%. This represents a significant improvement from minus 130% in the same period last year, reflecting early benefits from increased scale. Net loss for the quarter was minus US$712 million, with a net loss margin of minus 109% compared to minus 226% in the first quarter of 2024, again highlighting the benefits of scale.
Speaker Change: R&D expenses came in at 81 million U S dollar down 22% year over year, and 25% quarter over quarter.
Speaker Change: As a percentage of revenue.
Speaker Change: It was 12% compared to the 40% in the same quarter last year.
Speaker Change: While we saw a decline this quarter, we anticipate hydro R&D spending in the coming periods as we invest in the development of our next generation platforms and technologies.
Speaker Change: EBITDA for the first quarter of 2025, what's mine at 396 million U S dollar with an EBITDA margin of minus 60%.
Speaker Change: This represents a significant improvement from minus 130% in the same period last year, reflecting early benefits from increased scale.
Speaker Change: Net loss for the quarter was minus 712 million U S dollar.
Speaker Change: With a net loss margin of minus 109% compared to minus 226% in the first quarter of 2024.
Speaker Change: Again, highlighting the benefits of scale.
Anh Nguyen: These improvements underscore the progress we're making as we scale our operations and continue executing on our path towards profitability.
Speaker Change: This improvement underscore the progress, we're making as we scale our operations and continue executing on our path towards profitability now turning to Capex and cash flow Capex for the quarter was 114 7 billion.
Anh Nguyen: Now turning to capex and cash flow. Capex for the quarter was $147 million, down 24% year-over-year and 40% quarter-over-quarter. We anticipate higher spending in the coming quarters as we enter the final phases of construction for our new CKD facilities in Vietnam, India and Indonesia. Operating cash flow for the quarter was minus $607 million, compared to the minus $500 million the Q1 2024, largely due to the changes in the net working capital. In terms of cash flow efficiency, our cash burn in Q1 2025 was equivalent to 115% of revenue, a significant improvement from 256% in the same period last year.
Speaker Change: Dollar down 24% year over year, and 40% quarter over quarter.
Speaker Change: We anticipate higher spending in the coming quarters as we enter the final phases of construction for our new <unk> facilities in Vietnam.
Speaker Change: Here in Indonesia.
Speaker Change: Operating cash flow for the quarter was minus 607 million U S dollar.
Speaker Change: <unk> to the minus 500 million U S. Dollar in Q1, 2024 lastly, due to the changes in the networking capital.
Speaker Change: In terms of cash flows efficiency, our cash burn in Q1, 2025 was equivalent to 115% of revenue.
Speaker Change: A significant improvement from 256% in the same period last year.
Anh Nguyen: This reflects stronger cash flow management, as well as the initial benefits of scale. This improvement in the quality of cash flow mirrors the operating leverage we are starting to realize as we scale our operations and optimize costs. We expect to continue investing in R&D and CapEx for the remainder of the year and to drive innovation and enhance the customer experience. These investments will be balanced by continued discipline in execution and cost optimisation and our profitability target remains unchanged.
Speaker Change: This reflects stronger cash flow management as well as the initial benefits of scale.
Speaker Change: This improvement in the quality of cash flow mirrors, the operating leverage we are starting to realize as we scale our operations and optimize costs.
Speaker Change: We expect to continue investing in R&D and Capex for the remainder of the year.
Speaker Change: And to drive innovation and enhance the customer experience.
Speaker Change: These investments will be balanced by continued discipline in execution and cost optimization and our profitability target remains unchanged.
Anh Nguyen: Finally, an update on our liquidity. As of 31st of May this year, Vingroup has disbursed US$1.2 billion in loans, and our founder disbursed US$825 million in grants to VinFast. Besides cash and cash equivalent, our liquidity stands at around US$2.4 billion, including US$968 million eLog facility and the remaining US$1.4 billion from Vingroup loan and our founder grant.
Speaker Change: Finally, an update on our liquidity as of 31 of May This year. The group has disparate one 2 billion U S dollar in loans and our powder disparate 825 million U S dollar in grants to win fast.
Speaker Change: Besides cash and cash equivalent our liquidity stands at around $2 4 billion U S dollar, including $968 million.
Speaker Change: Estrada Iraq facility and the remaining $1 4 billion U S dollar from <unk> alone and our founder grant.
Operator: Operator, let's open for Q&A. Thank you. We will begin the Q&A session now.
Speaker Change: Operator, let's open for Q&A.
Speaker Change: Thank you.
Speaker Change: We will begin the Q&A session, if you'd like to ask questions on the phone. Please press star one.
Operator: If you'd like to ask questions on the phone, please press star 11 and wait for a name to be announced. One moment for the first question.
Speaker Change: No.
Speaker Change: One moment for the first question.
Speaker Change: Okay.
Andres Sheppard: The first question comes from Andres Sheppard from Canto Fish Jaro. Please ask your question. Hey, everyone. Good morning or good afternoon. Thank you so much for taking our questions and congratulations on the quarter and all of the vehicle delivery ramp up. Very exciting.
Speaker Change: Our first question comes from Andrea <unk> from Cantor Fitzgerald. Please ask your question.
Andrea: Hey, everyone. Good.
Speaker Change: Good afternoon. Thank you so much for taking my questions and congratulations on the quarter.
Speaker Change: Vehicle delivery ramp up very exciting.
Thuy Le: Madame Thuy, just wondering if you could maybe remind us just the timeline on the new factories, the one in Vietnam, the one in India, the one in Indonesia. When do you expect them to be operational exactly? I know you touched on it briefly. And what do they do to the total production capacity? Thank you.
Speaker Change: We're going to we're just wondering if you could maybe remind us just the timeline on the new factories, one in Vietnam. The one in India, one in Indonesia.
Speaker Change: When do you expect it to be operational exactly I know you touched on it briefly and.
Speaker Change: And what do they do to the total production capacity. Thank you.
Speaker Change: Hi.
Speaker Change: How are you doing.
Thuy Le: All I will answer now. Thuy Le, Anh Nguyen, VinFast Auto Ltd Hi, Thuy Le, Anh Nguyen, VinFast Auto Ltd And our new facility is helping to make more affordable models like video green, VF3 and VF5. Andres Sheppard, Thuy Le, Anh Nguyen, VinFast Auto Ltd Got it. Very helpful. Thank you.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: Oh great.
Speaker Change: Yes.
Speaker Change: A majority of the vehicles about 19%.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Production with existing.
Speaker Change: Hi.
Speaker Change: Okay.
Speaker Change: High end models.
Speaker Change: Yeah.
Speaker Change: Green.
Speaker Change: Lynn.
Speaker Change: And our new facility.
Speaker Change: So it makes it more affordable.
Speaker Change: Yeah.
Speaker Change: Right.
Speaker Change: Hum.
Speaker Change: Those are coming.
Speaker Change: India.
Speaker Change: Hi.
Speaker Change: Yeah.
Speaker Change: And.
Speaker Change: One before that.
Speaker Change: India.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Got it very helpful. Thank you and maybe just as a quick follow up I'm wondering if you can maybe remind us what are some of the key catalysts you think investors should be looking at either for remaining of this year or into next year, just making sure recapturing all the.
Thuy Le: And maybe just a quick follow up. I'm wondering if you can maybe remind us, you know, what are some of the key catalysts you think investors should be looking at either for remaining of this year, or into next year, just making sure we capturing all the major big highlights that catalysts that you want us to be aware of. Thank you. Our upcoming EV line-up will deliver enhanced technology offerings while being more cost-effective to produce. This will position us to stay competitive and align with evolving consumer preferences. As mentioned before, 2025 is the foundational investment year in LED platforms and solar architecture.
Speaker Change: Your big highlights that our catalysts that you want us to be aware of thank you.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: For the.
Speaker Change: So actually.
Speaker Change: Okay.
Speaker Change: Makes sense.
Speaker Change: Please.
Speaker Change: Okay.
Speaker Change: Scaling operations.
Speaker Change: Product development.
Speaker Change: Excuse me.
Speaker Change: Yes.
Speaker Change: Oh late.
Speaker Change: Uh huh.
Speaker Change: So first of all on the scaling.
Speaker Change: Oh good.
Speaker Change: Do you think that level of vehicle deliveries in 2025.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: And maintained a strong momentum into 2026.
Speaker Change: This growth will be.
Speaker Change: Deeper market penetration.
Speaker Change: Okay.
Speaker Change: Asia.
Speaker Change: Enabled by our new CEO.
Speaker Change: <unk>.
Speaker Change: Yeah.
Speaker Change: Hum.
Speaker Change: Generation product.
Speaker Change: Our upcoming.
Speaker Change: No.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: Cost effective.
Speaker Change: Hum.
Speaker Change: This would position us to stay competitive and aligned with evolving.
Speaker Change: Uh huh.
Speaker Change: And finally.
Speaker Change: Yeah.
Speaker Change: As mentioned before 2025.
Speaker Change: Yeah.
Speaker Change: Okay.
Thuy Le: These advancements are designed to significantly improve the manufacturing efficiency, and significantly reduce the ROM cost. Perfect. Very helpful. Thank you so much. Congratulations again, Alpaca. Thank you for the question.
Speaker Change: Uh huh.
Speaker Change: Thank you.
Speaker Change: It can be improved in the manufacturing.
Speaker Change: It is significantly reduced.
Speaker Change: Oh.
Speaker Change: Thank you.
Speaker Change:
Speaker Change: Uh huh.
Speaker Change: Oh yeah.
Speaker Change: Like I mentioned.
Speaker Change: Hi.
Speaker Change: Before.
Speaker Change: Yes.
Speaker Change: Perfect very helpful. Thanks, So much congratulations again I'll pass it on.
Speaker Change: Thank you for the question one moment for the next question.
Operator: One moment for the next question.
Greg Lewis: Our next question comes from the line of Greg Lewis from BDIG. Please go ahead. Yeah, hi, thank you. And good evening. And thanks for taking my questions. Um, you know, you know, appreciate the comments around the capex.
Luis: Next question comes from the line a quick Luis <unk> from <unk>. Please go ahead.
Luis: Yes, hi, Thank you and good evening and thanks for taking my questions.
Luis: I appreciate the comments around the Capex and I guess the expected ramp I was hoping just as we think about the remainder of 2025, and obviously theres a lot happening with the expansions for the day, they're continuing R&D day.
Thuy Le: And I guess the the expected ramp, I was hoping, you know, just as we think about, you know, the remainder of 2025. And, you know, obviously, there's a lot happening with, you know, with the expansions for the CK day, the continuing R&D.
Thuy Le: Um, you know, just kind of hoping you could maybe provide some Thuy Le, Anh Nguyen, VinFast Auto Ltd Thank you for your question. For the CAPEX, we plan to spend a total of $1.6 billion in 2025. Over 50% of this will go towards research and development, including both R&D expenses and capitalized R&D investments for developing new models and researching our current product line. The remaining amount, under 50%, will primarily be allocated to build our CKD facilities across Asia, like Maranti, I just said.
Luis: I'm, just kind of hoping you could maybe provide some.
Luis: Color around.
Luis:
Luis: The timing of this capex and really.
Luis: I was kind of youre thinking about the whole year.
Luis: When could we see capex kind of peak out.
Luis: And all of them.
Luis: Is that a Q2 or Q3 type of type of thing were thinking about.
Luis: Thank you for your question.
Luis: For the Capex.
Luis: In Spain.
Luis: Total of a one 5 million.
Luis: In 2025.
Luis: Oh.
Luis: Thanks.
Luis: We'll go to rich.
Luis: And development, including.
Luis: Lavinia boat IME.
Luis: Our capitalized R&D investment.
Luis: What are you seeing new models and we are seeing our current mine.
Luis: The remaining amount.
Luis: Our primarily allocated to them.
Luis: Our CE facilities across Asia like a biopsy.
Luis: Yeah.
Unknown Executive: Okay, great.
Luis: Okay, Great and then and then one other question for me is on the decision to kind of pivot into the bus market.
Thuy Le: And then and then one other question for me is on the decision to kind of pivot into the bus market. You clearly highlighted Europe, and I guess the core markets around other Asia, you know, kind of curious, as you think about rolling out the bus expansion, you know, where are we in that process? Maybe strategically, how you thought about, you know, moving into that sector? And do we kind of have any realizing, I think, you just announced this, realizing it's early days, and these things don't happen overnight? When could we potentially see VinFast start delivering buses?
Luis: Clearly highlighted Europe.
Luis: The split of the core markets around all of our Asia.
Luis: Kind of curious as you think about rolling out.
Luis: The robust expansion.
Luis: Where are we in that process.
Luis: Maybe strategically how you thought about.
Luis: Moving into that sector and do we kind of have any realizing I think you just announced this realizing its early days and these things don't happen overnight when could we potentially see been fair start delivering buses.
Luis: Yeah.
Luis: Okay.
Thuy Le: So we already started delivering buses. Thuy Le, Anh Nguyen, VinFast Auto Ltd of Thuy Le, Anh Nguyen, VinFast Auto Ltd, Thuy Le, Anh Nguyen, VinFast Auto Ltd, Thuy and Thuy Le, Anh Nguyen, VinFast Auto Ltd. ElectricBus.
Luis: So we already started delivering buses.
Luis: Big volume.
Luis: Hum.
Luis: Yes.
Luis: Our fleet.
Luis: But to deliver about four years.
Luis: 1000.
Luis: Yes.
Luis: Yes.
Luis: We also started the process.
Luis: Sure.
Luis: Okay.
Luis: Yes.
Luis: So we set up the team.
Luis: And in Asia.
Luis: Hello.
Luis: Are they sort of in the middle East and the U S.
Luis: Gradually way spending market.
Mark: Hi, Mark.
Luis: Sure.
Luis: The growth.
Luis: Electric bus.
Luis: Situations.
Operator: Okay, thank you very much. Thank you for the questions. One moment for the next question.
Luis: Okay. Thank you very much.
Luis: Yeah.
Luis: Thank you for the questions one moment for the next question.
Unknown Executive: Our next question.
Speaker Change: Our next question Hello, Yes. Please go ahead.
Jim McIlree: Yep, please go ahead and introduce yourself, please. Yeah, thank you. It's Jim McIlree at Chardon Capital. Thank you and good morning. It looks like the average selling price for the for the vehicles was flat quarter to quarter. Can you... Can you project what you think the trajectory of ASPs are going to be for the rest of the year? Thank you for your question. For the Q1 2025, the ASP was largely in line with the Q4 2024 at around USD$16,000 and compared to the USD$19,000 for the full year 2022-2024. For the full year 2025 ASP, it's likely to remain under USD$20,000 with our smaller model like the F3 and F5 expected to contribute around 50% of the delivery.
Luis: Okay.
Luis: Yes.
Luis: Jim.
Luis: Jordan capital.
Luis: Thank you and good morning.
Luis: It looks like the average selling price for the for the vehicles was flat quarter to quarter.
Luis: Can you.
Luis: You project, what you think the trajectory of Asp's are going to be for the rest of the year.
Luis: Yeah.
Luis: For your question for Q1 can you quantify the ISP was largely in line with the Q4 2020.
Luis: All around.
Luis: In Portland.
Luis: U S dollar.
Luis: Compared to the 19 housing U S dollar for the full year.
Luis: Okay.
Luis: For full year 2020 by ISC is likely to remain under 20000 a week.
Luis: Our while our model like it'd be a pre buy.
Luis: B contribute around 50% of the delivery.
Thuy Le: We also expect to increase the contribution from the new green series. That's very helpful. Thank you.
Luis: We also expect the increasing contribution from the new theory.
Speaker Change: That's very helpful. Thank you and then secondly.
Anh Nguyen: And then, secondly, The Adjusted Gross Margin. This quarter was If my if my data is correct. A little bit higher than, no. Excuse me, it was about even to Q4, even though volumes were much lower this week. This quarter. Can you comment on on the variable margin versus fixed costs and your production and when it might be reasonable to expect. Variable Margins to be to crossover and then when you would get then when you would get the full gross margin to crossover. Thank you very much. Thank you for the questions.
Speaker Change: The adjusted gross margin.
Speaker Change: This quarter.
Luis: It was.
Luis: If my data is correct.
Luis: A little bit higher than <unk>.
Luis: Excuse me it was it was about even to Q4, even though volumes were much lower.
Luis: This quarter.
Luis:
Luis: Yeah.
Luis: Your comment on on the variable margin versus fixed costs in your production in <unk>.
Luis: When it might be reasonable to expect.
Luis: Variable margins to be.
Luis: Ross over and then when you would get.
Luis: Then when you would get the full gross margin to crossover.
Luis: Okay.
Luis: Thank you for your question.
Luis: The gross margin.
Luis: Note that this quarter, we have the.
Luis: That does and selling at the delivery.
Luis: Like a related way lower.
Luis: The Vogel of Q4 last year.
Luis: Paul.
Luis: To remind that in Q4 of last year, we delivered.
Luis: <unk> three.
Luis: <unk> 3000 vehicles compared to the.
Luis: 36000 in Q1 this year.
Luis: And especially on the Q1 is typically like at the lowest season in the year in Vietnam, primarily due to the lunar new year holiday.
Luis: <unk>.
Luis: Also to remind that last quarter our margin.
Luis: Excluding the one time re chartering program in <unk>.
Luis: Factory write down charges at that minus thank you.
Luis: <unk>.
Luis:
Luis: And of course like a wave one.
Luis: Humphrey, Inc, and inventory write down got it.
Luis: So the margins are going to be like a minus 20%.
Luis: It's better.
Luis: And if you automate even before.
Luis: Also elaboration or the our effort to improving.
Luis: The pump optimization.
Luis: And the production costs.
Luis: Isn't that the audience.
Luis: Is that.
Luis: Delivery is related the lower Thunder.
Luis: Q4, 2020 or so.
Luis: So the whole company, we put the effort to the reviews.
Luis: The bomb optimization.
Luis: I mean the E.
Luis: In initiate it is.
Luis: Bob optimization as well as for the idea to improve the production cost.
Luis: We improved the arrival cost.
Luis: Two a lack of told us are the target of <unk>.
Luis: But even in some of their crop.
Luis: Margin.
Luis: In 2010.
Luis: Our guidance.
Luis: Thank you.
Luis: Thank you very much. Thank you for the question there are no more questions from the phone line and get back to.
Unknown Executive: There are no more questions from the phone line. I'll hand it back to the management to continue. Thank you.
Luis: Hi management.
Luis: <unk>.
Luis: We have a question on the line.
Thuy Le: Please share more details on the new vehicle platform and EE architecture, what changes are being Thuy Le, Anh Nguyen, VinFast Auto Ltd Electric Drivers Thuy Le, Anh Nguyen, VinFast Auto Ltd why and Thuy Le, Anh Nguyen, VinFast Auto Ltd. Thuy Le, Anh Nguyen, VinFast Auto Ltd Thuy Le, Anh Nguyen, VinFast Auto Ltd In addition to the new platform, we also... Thuy Le, Anh Nguyen, VinFast Auto Ltd Thank you Madam Thuy, the next question on the line Andres Sheppard, Thuy Le, Anh Nguyen, VinFast Auto Ltd Can you assess the relative contribution of... Thank you for your question.
Speaker Change: Could you share more details on the new vehicle platform and architecture, what changes are being made.
Luis: Yeah.
Luis: Our next generation.
Luis: Right.
Luis: You can see commonality.
Luis: Okay.
Luis: It's something that we.
Luis: Okay.
Luis: Yes.
Luis: Yes.
Luis: Yeah.
Luis: Yeah.
Luis: Yeah.
Luis: Great.
Luis: Vehicles.
Luis: Okay.
Luis: Yeah.
Luis: Secondly, electric drive unit.
Luis: Oh yeah.
Luis: Powerful.
Luis: Alrighty.
Luis: While optimizing.
Luis: Got it.
Luis: And finally.
Luis: Great.
Luis: Yeah.
Luis: Oh no no.
Luis: And electronic architecture.
Luis: Right.
Luis: Wiring.
Luis: <unk>.
Luis: Yeah.
Luis: Sure.
Luis: The ability.
Luis: Support long term cost reduction.
Luis: Uh huh.
Luis: Yes.
Luis:
Luis: In addition to the new platform, we also improve speed.
Luis: Take care.
Luis: Okay F&B redesign.
Luis: Okay.
Luis: Critical.
Luis: Okay.
Luis: Great.
Luis: Maybe if I could.
Luis: A couple of them I think that Brian.
Luis: Thanks.
Luis: Thank you.
Luis: Thank you Madam.
Luis: Next question on the line.
Luis: As we look ahead to expected improvements in profitability.
Luis: How do you assess the relative.
Luis: <unk> volume.
Luis: Volume.
Luis: Versus optimization.
Luis: Okay.
Luis: Thank you for your question.
Thuy Le: We expect a meaningful contribution from both vertical integration and supplier optimisation. But the greater impact will likely come from the BOM optimisation and given that our current cost structure, variable cost improvements will have the stronger effect on our operating leverage. VinFast is at a unique point where we can pull both levers effectively. Demand and adoption are growing in our car market, which gives us momentum, and also at the same time, our current generation of the vehicles carries a relatively high volume cost. We acknowledge that there were only inefficiencies and costly material choices that gives us a significant room for improvement.
Luis: We expect a meaningful contribution.
Luis: A lot of vertical integration and supplier optimization.
Luis: But the greater impact will likely come from the palm optimization.
Luis: And given that our current cost structure.
Luis: Cost improvements will have a sugar.
Luis: Effect on air.
Luis: Operating leverage.
Luis: The path is at a unique point of where we can pull a lever.
Luis: Lee.
Luis: <unk>.
Luis: Demand and adoption are growing in our core market.
Luis: Give us some momentum.
Luis: And also at the same time, our current generation of the vehicles.
Luis: <unk> related <unk> costs.
Luis: At least they will only.
Luis: Fees and costly material choices.
Luis: Gives us a significant.
Luis: Or improvement.
Thuy Le: As our volume increases, we also gain more bargaining power with suppliers, which creates a buy rule, lower cost, leads to better pricing for customers, which in turn supports further growth in volume. Thank you.
Luis: As our volume increase we also gain more packaging power.
Luis: Sure.
Luis: Baidu, a lower cost a little bit better pricing or customer.
Luis: Can support.
Luis: For the World.
Luis: Hello.
Luis: Thank you.
Luis: Our next question.
Luis: Leverage on the rationale and timing on closing this box.
Thuy Le: closing VinFast B2C showrooms in North America. Closing the DTC showrooms in North Europe, a big contribution to our dealership-led model that we've been pursuing for a while. This will further enhance efficiency and scale for our business globally. Thuy Le, Anh Nguyen, VinFast Auto Ltd Coordinated.
Luis: Sure.
Luis: North America and Europe.
Luis: We are closing the BTC.
Luis: Okay.
Luis: Elisa.
Luis: Like model.
Luis: Hum.
Luis: See in scale.
Luis: Uh huh.
Luis: Our dividends remain strategic.
Luis: And if you take a pivotal role in our growth.
Luis: Sure.
Luis: North America, and Europe, we may not.
Luis: Yes.
Luis: Okay.
Luis: Regarding marketing.
Luis: Indirect marketing agenda.
Luis: Activities in general.
Luis: And also coordinate with.
Luis: Execute.
Luis: So promotion activities in markets.
Thuy Le: Thuy Le, Anh Nguyen, VinFast Auto Ltd Do you expect Europe and North America to contribute to volume deliveries in 2025 and 2023? And do you plan to continue selling... Thuy Le, Anh Nguyen, VinFast Auto Ltd We've shifted away from turnkey development to a more collaborative engineering model with key suppliers. For example, interior seating, common seat structures are being co-developed for which we use across models. For chassis, body and wide, and exterior closures, we've simplified design across these models, working with suppliers to lower complexity and cost with something optimised for scale. And with the madam thesis that we expect for the economy of scale for the sourcing for this year with the higher volume.
Luis: Regarding sales and warranty.
Luis: Currently.
Luis: Yeah.
Luis: Okay.
Luis: Got it.
Luis: Okay.
Luis: Yes.
Luis: Great.
Luis: Yeah.
Luis: Okay.
Luis: Sure.
Luis: How much do you expect Europe and North America.
Luis: Okay.
Luis: Okay.
Luis: And to continue selling.
Luis: Right.
Luis: Okay.
Luis: Thank you.
Luis: Okay.
Luis: Got it.
Luis: Okay.
Luis: Sure.
Luis: Okay.
Luis: Hi.
Luis: Yes.
Luis: Right.
Luis: Okay.
Luis: Yeah.
Luis: Thank you.
Luis: Okay.
Luis: Okay.
Luis: Sure.
Luis: Okay.
Luis: Yeah.
Luis: Sure.
Luis: Good morning.
Luis: Okay.
Luis: Okay.
Luis: In.
Luis: Yes.
Luis: Pinnacle.
Luis: Yes.
Luis: Yeah.
Luis: This is mark.
Luis: Glen.
Luis: <unk>.
Luis: Yes.
Luis: Thank you Madam III the next.
Luis: Thank you.
Luis: Keith.
Luis: Further reduce costs.
Luis: We have shifted away from turnkey development through a wall calibrated engineering model with key suppliers.
Luis: Example.
Luis: We are ceding come.
Luis: And then she commented structures are being courted locked.
Luis: We used our cost models.
Luis: <unk> is a body in white and exterior clauses, we simplified design across this model working with suppliers to lower complexity and cost.
Luis: Yes.
Luis: Not being optimized for scale.
Luis: And with the model.
Luis: We expect all the echo in economic scale or.
Luis: The the sourcing for this year with the hydro.
Thuy Le: Thank you.
Luis: <unk>.
Thuy Le: Can you remind us of the liquidity status of VinFast? As of the 31st of May, Vingroup has disbursed US$1.2 billion in loans, and our founder disbursed US$825 million in grants to VinFast. Besides cash and cash equivalents, our liquidity stands at approximately US$2.4 billion, including a US$968 million e-lock facility, and the remaining US$1.4 billion from Vingroup loans and our founder's grants. The use of proceeds from the capital injection is for operations and investment activities to support the next growth Let's go first. Our capital development strategy balanced near-term growth investment with long-term sustainability. In 2025, this year, we expect our total cash flow, including OPEX and CAPEX, to be around $2 billion to $2.5 billion, of which the majority of the OPEX has incurred during the Q1 2025 as we stock up inventories to get ready for sales ramp up in the remaining quarter of the year.
Luis: Next question on the line can you remind us what the liquidity.
Luis: Ross.
Luis: As of the 31st of May I've been go past that.
Luis: One 2 billion U S dollar in loans and our saga.
Luis: A million 825 million U S dollar in France to be fast.
Luis: Our cash and cash equivalents.
Luis: Our liquidity has been.
Luis: Nearly two two by 4 billion U S dollar including 908.
Luis: Million dollar HELOC activity.
Luis: The remaining $1 4 billion U S dollar from the law and our founder grant.
Luis: The use of proceeds from the capital injection or operation and investment activity.
Luis: A net.
Luis: No.
Luis:
Luis: Mexico flight.
Luis: Our capital deployment.
Luis: We balance near term ROE investment with long term sustainability.
Luis: In 2025.
Luis: We expect our total cash burn, including Opex and capex to be around.
Luis: 2 billion to $2 5 billion U S dollar.
Luis: Of which the majority of the Opex has incurred during our Q1 2020 by SBS stock up inventory to get ready for sales drama in the remaining quarter of the year.
Thuy Le: For the capital expenditure, it makes up less than 50% of the total $1.6 billion that I mentioned in the early questions that we allocated for the CAPEX and R&D combined. The majority of this CAPEX is dedicated to develop our CKD activities across Asia. Thank you.
Luis: For the capital expenditure and makes up less than 50% of the total $1 6 billion U S dollar.
Luis: And in there are only a fraction.
Luis: So we allocate capex and <unk> combined.
Luis: The majority of this capex is dedicated to.
Luis: Our ticketing activities across Asia.
Luis: You.
Luis: [noise] visibility.
Luis: Yeah.
Luis: Ross.
Luis: Awesome.
Luis: Rich.
Thuy Le: Can I read more on this comment? Back to the guidance that Madam Thuy already shared that we remain committed to our four-year target of at least doubling the 97,000 deliveries in 2024 and continue to emphasize execution, particularly in key Asian markets. Maintaining and strengthening our market leadership in Vietnam is our priority. However, consistent with our disclosure practice, we do not provide guidance on financial breakdowns by individual markets. When evaluating profitability, if we adjust for items such as NRV with provision depreciation and amortization and on-off expenses from the our complementary charging program, we see that the certain vehicle models with sufficient scale already got profit.
Luis: One of his comments.
Luis: Back to the guidance that modality.
Luis: <unk> already shared that we remain committed to our full year target.
Luis: At least doubling the.
Luis: 97000 deliveries in 2021 and continue to emphasize execution.
Luis: Digital only in key end market.
Luis: Maintaining and strengthening our market leadership in Vietnam.
Luis: In our priority.
Luis: Consistent with our disclosure practice, we do not provide guidance.
Luis: Picked out by individual market.
Luis: When evaluating profitability.
Luis: Four.
Luis: For items, such as <unk> or even <unk>.
Luis: Depreciation and amortization and <unk>.
Luis: It's from the hour complimentary chartering program or we see that the certain vehicle model.
Luis: Okay.
Luis: <unk> already got.
Unknown Executive: Thank you.
Luis: Pete.
Luis: Thank you.
Unknown Executive: We have a final question from the webcast. oldest model was launched just two years ago.
Luis: Hi.
Luis: Final question.
Luis: Yes.
Luis: Sure.
Luis: Oh.
Luis: Got you.
Luis: Yes.
Luis: After refresh rate.
Luis: <unk>.
Luis: Alright.
Unknown Executive: Strategy, CanTest, Additional, and old units.
Luis: [noise] strategy.
Luis: Oh, yes.
Luis: Okay.
Luis: Okay.
Luis: Okay.
Thuy Le: How we document the training session, how we track to get time through the day, how Thuy Le, Anh Nguyen, VinFast Auto Ltd and once the product Long-term, our life cycle will be shorter than the industry norm. Thank you, Aditi.
Luis: Yeah.
Luis: Yeah.
Luis: Yeah.
Luis: Yeah.
Luis: Yeah.
Luis: Yeah.
Luis: Yes.
Luis: Hum.
Luis:
Luis: We're getting a lot.
Luis: Okay.
Luis: Yeah.
Luis: Okay.
Luis: Yeah.
Luis: Hmm.
Luis: Yeah.
Luis: Modestly.
Luis: Sure.
Luis: Okay.
Luis: Okay.
Luis: Okay.
Luis: Yes.
Luis: Okay.
Luis: Well.
Luis: Okay.
Luis: Yeah.
Luis: Okay.
Luis: Okay.
Luis: And once the product lines.
Luis: Okay.
Luis: Alright.
Luis: Given though.
Luis: Centric approach.
Luis: Okay.
Luis: Combined with our engineering focus on cost efficiency.
Luis: Okay.
Luis: At least in the OEM.
Luis: Preferences and trends.
Luis: So long.
Luis: Sure.
Luis: Right.
Luis: We'd be.
Luis: Yes.
Luis: Yes.
Luis: Got it.
Luis: The industry now.
Thuy Le: It looks like we have another question on the line. The U.S. remains one of our key markets, and we are committed to it for the long term.
Luis: Got it.
Luis: We have another question on the line.
Luis: Got it.
Luis: Right.
Luis: Sure.
Luis: Why is that.
Luis: The U S. A remained our leg one of the our key markets.
Luis: We are committed to it for the long term.
Thuy Le: This is reflected in the fact that we have made no changes in our plan to have a North Carolina facility by 2028.
Luis: Is that reflected in the fact that we have made no changes in our plan.
Luis: North Carolina facility by 2028.
Thuy Le: We thank our dealers for their cooperation and support, and continue to have the meaningful dialogue as we work together through macro uncertainties.
Luis: We think our dealers for their cooperation and support and continue to have a meaningful dialogue at me.
Luis: Together, a true macro uncertainty.
Thuy Le: As we close our D2C storerooms in North America, we are also focused on fostering dealers' performance, and also expanding our dealer pipeline, both in California and across North America.
Luis: Let me close our D to C showrooms in North America.
Luis: We're still focused on fostering.
Luis: The AMA and also expanding our dealer pipeline, both in California and across North America.
Thuy Le: The current market backdrop has provided us with an appropriate window to adjust our execution focus, which is why we are placing the highest priority in Asia in the near term, given this is a reason where the JTEC-3 for EV adoption is clearest. Thank you.
Luis: The current market backdrop.
Luis: Has provided us with an appropriate window to adjust our execution focus.
Luis: Which is why we are flexing their highest priority in Asia in the near term. Given this is a reason whether oh J victory or EV adoption is clear it. Thank you.
Luis: And that concludes today's conference call. Thank you everyone.
Luis: Yeah.
Operator: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation.
Speaker Change: Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now.
Operator: You may now disconnect your Thank you for watching!
Luis: Your line.
Luis: Okay.
Luis: [music].
Luis: Hum.
Luis: [music].
Luis: [music].