Vietnamese electric vehicle maker VinFast reported a deepening net loss of $773.5 million in the second quarter, a 27% increase from the previous quarter and 40% higher than the same period last year. The losses were attributed to rising costs related to the company’s aggressive overseas expansion and impairment charges, despite a 33% quarter-on-quarter revenue increase to $357 million.
“We are still a startup so we expect to have losses for a couple more quarters,” VinFast Chairwoman Thuy Le said in an interview with Reuters. She added, “However, the industry is driven by volumes. As we increase the volumes and optimize the costs, we should be able to get to even and profitability.”
VinFast’s selling expenses rose 25.5% from the previous quarter due to increased marketing costs and a $104 million impairment charge on its vehicle inventory, significantly higher than the $5 million charge in Q1. The company’s gross margin stood at negative 62.7%, but Le noted that excluding these factors, gross margin had improved.
In July, VinFast halted its $2 billion manufacturing complex project in North Carolina, pushing the timeline to 2028 due to challenging market conditions. The company also revised its delivery target for 2024 to 80,000 vehicles, down from the initial goal of 100,000. First-half deliveries stood at 22,348 vehicles, with half of those going to related parties, including its taxi affiliate GSM.
VinFast is now focusing on expanding into Asian markets like Indonesia and the Philippines while maintaining confidence in its home market of Vietnam. The company expects strong demand for its VF 3 mini SUV and VF 5 city model to drive the remaining sales this year. “We are confident about the 80,000 deliveries guidance for this year,” Le said, adding that orders for the VF 3 exceeded production capacity, with only 20,000 units available for delivery.
VinFast shares fell 2.02% to $3.88 in pre-market trading on Nasdaq on Friday, marking a more than 50% drop since January.
