Executive Summary / Key Takeaways

• VinFast is rapidly expanding its global electric vehicle (EV) footprint, particularly in high-growth Asian markets, leveraging a unique "green mobility ecosystem" and a strategic shift to a dealer-led distribution model.
• The company is on track to at least double its 2024 EV deliveries in 2025, targeting 200,000 units, driven by robust demand in Vietnam and new market entries in India, Indonesia, and the Philippines.
• Technological advancements, including new vehicle platforms and zonal E/E architecture, are expected to drive significant cost savings and enhance customer experience, with the first next-generation model, Limo Green, already delivered.
• Despite current gross losses, VinFast is making progress towards profitability, with normalized gross margins for its VF 3 and VF 5 models already positive, and expects operating leverage to build as volumes scale.
• Strong financial backing from its founder and parent company, Vingroup, provides substantial liquidity, supporting aggressive capital expenditure and R&D investments through 2026 and 2027.

VinFast's Electrifying Ascent: A Global EV Challenger Emerges

VinFast Auto Ltd. (VFSWW), a subsidiary of Vietnam's Vingroup JSC, has rapidly transformed from a nascent automotive OEM into a dynamic force in the global electric vehicle market. Founded around 2017, the company made a pivotal strategic shift to an all-EV strategy approximately two years later, setting the stage for its aggressive expansion. This strategic pivot, coupled with a vertically integrated manufacturing approach, positions VinFast as a challenger in an increasingly competitive industry. The company's overarching strategy centers on making EVs accessible to a broad consumer base through a diverse product portfolio, an integrated green mobility ecosystem, and a flexible go-to-market approach that adapts to regional dynamics.

The global automotive industry is undergoing a profound transformation towards electrification, driven by environmental mandates, technological advancements, and shifting consumer preferences. In this evolving landscape, VinFast has carved out a distinct niche, particularly in emerging markets where EV adoption is still nascent but accelerating. The company's foundational strength lies in its ability to quickly bring a range of EV models to market, from compact urban cars to electric SUVs, e-scooters, and e-buses, catering to diverse use cases. This broad product offering, combined with a focus on affordability and a comprehensive after-sales service policy, underpins VinFast's ambition to be a global leader in electric mobility.

Technological Edge: Driving Efficiency and Experience

VinFast's long-term competitiveness is deeply rooted in its technological differentiation and ongoing innovation. The company is transitioning to next-generation vehicle platforms and a zonal Electrical and Electronic (E/E) architecture, which represent a significant step forward in cost efficiency, commonality, modularity, and vertical integration. This strategic evolution, planned over several years, aims to simplify the engineering process while integrating world-class technologies.

The benefits of this technological shift are tangible and quantifiable. The new E/E architecture, designed internally, reduces wiring complexity and enhances software product capability, supporting long-term cost reductions and future profitability. It also significantly improves the customer experience, cutting Over-The-Air (OTA) update times from hours to less than one hour with more reliable remote updates. Furthermore, the new platforms will integrate in-house developed components, improving energy efficiency and optimizing scalability across product lines. The electric drive units (EDUs) are powerful internal designs, providing improved performance while optimizing scalability. The "top hat" architecture has also been redesigned for standardized interfaces and improved manufacturing efficiency.

VinFast's R&D initiatives are directly tied to these advancements. The company anticipates higher R&D spending over the next 12 months to support the technology refresh of existing models and the development of new ones on these advanced platforms. The Limo Green MPV, delivered in early August 2025, is the first model to debut with the next-generation platform and zonal E/E architecture, signaling the tangible impact of these R&D efforts. These technological advancements are critical for VinFast's competitive moat, enabling lower bill of material (BOM) costs, better margins, and a stronger market position as a provider of technologically advanced yet accessible EVs.

Competitive Landscape and Strategic Positioning

VinFast operates in a highly competitive global EV market, facing both established players and agile newcomers. While direct quantitative comparisons with all competitors are challenging to ascertain, qualitative factors and VinFast's performance trends offer clear insights into its positioning.

In its home market of Vietnam, VinFast has achieved remarkable dominance, maintaining the #1 position since September 2024. The company outpaced the market with 3.4x volume growth in the first half of 2025, delivering more units than the next two players combined. Its market share of overall auto sales in Vietnam increased to nearly 40% in Q1 2025, up from approximately 20% in the prior year. This strong domestic performance is a testament to its localized strategy, affordable models like the VF 3 and VF 5, and the integrated green mobility ecosystem.

Globally, VinFast positions itself as a challenger, particularly in emerging regions. Compared to premium players like Tesla (TSLA), VinFast offers a more accessible and diversified portfolio, including e-scooters and e-buses, appealing to cost-sensitive consumers. While Tesla leads in technological sophistication, especially in autonomous features, VinFast's vertical integration under Vingroup and its focus on localized manufacturing provide potential cost advantages. Against Chinese rivals like NIO (NIO) and XPeng (XPEV), which emphasize smart features and AI, VinFast's strength lies in its ecosystem approach and regional customization. However, it lags in innovation speed for advanced autonomous systems. When compared to mass-market leader BYD (BYDDY), VinFast aims to match affordability in certain segments, but BYD's scale and battery technology leadership present a formidable challenge in cost efficiency and product performance.

VinFast's competitive advantages, or "moats," include its vertical integration, which streamlines supply chains and potentially leads to superior margins, enabling faster market entry. Its regional focus and customization allow for better adaptation to local needs, helping to capture share in price-sensitive segments. However, vulnerabilities include its status as a newer entrant, leading to higher customer acquisition costs, and a more limited global presence compared to established players, which could impact revenue diversification. The company's strategic shift from a direct-to-consumer model to a dealer-led distribution model in North America and Europe is a direct response to optimize operations, reduce risk, and leverage local market expertise, enhancing its competitive standing.

Financial Performance and Operational Momentum

VinFast's financial performance in the first half of 2025 reflects its aggressive growth strategy and ongoing efforts towards cost optimization. In Q2 2025, the company reported a 172% year-over-year increase in delivery growth and a 92% year-over-year increase in revenue, reaching USD 663 million. Total EV deliveries for the first half of 2025 stood at 72,167 units, a 223% increase year-over-year.

Profitability remains a key focus, with gross margin in Q2 2025 at negative 41%, an improvement from negative 63% in Q2 2024. This improvement was attributed to increased sales and better cost management. Notably, on a normalized basis (excluding NRV provisions, exceptional items, and non-cash depreciation and amortization), the VF 3 and VF 5 models are already gross margin positive. The company's R&D expenses decreased 12% year-over-year in Q2 2025 to USD 93 million, reflecting the completion of product development work on multiple modules. However, R&D spending is expected to increase over the next 12 months for next-generation platforms. SG&A expenses also saw an 11% year-over-year decrease to USD 136 million in Q2 2025. Adjusted EBITDA for Q2 2025 was negative USD 419 million, with a net loss of negative USD 812 million.

Capital expenditure is significant, with Q2 2025 CapEx increasing 102% year-over-year to USD 212 million, driven by investments in new plants. Operating cash flow for Q2 2025 was negative USD 463 million, with cash burn equivalent to 101% of revenue, an improvement from 116% in Q2 2024. The e-scooter business, while experiencing substantial delivery growth (447% year-over-year in H1 2025), remains loss-making in the near term as the company prioritizes adoption.

Liquidity and Strategic Funding

VinFast's liquidity position is robust, bolstered by significant financial support from its founder, Mr. Pham Nhat Vuong, and parent company, Vingroup. As of June 30, 2025, total liquidity stood at USD 4.2 billion, including cash and cash equivalents, USD 1.6 billion in expected cash proceeds from the R&D assets spin-off, and remaining fundraising commitments. The company received USD 1.1 billion from the founder's grant agreement and had USD 1.2 billion in outstanding borrowings from Vingroup as of the same date. This substantial backing, including a new term loan agreement with Dutch Bank AG and SeaTown Holdings, provides ample runway to execute its growth strategy through 2026 and 2027. VinFast plans to spend approximately USD 2 billion to USD 2.5 billion in total cash burn in 2025, with over 50% allocated to R&D and capitalized R&D for new models and product refreshes, and the remainder for building CKD facilities across Asia.

Outlook and Growth Trajectory

VinFast is highly confident in achieving its 2025 delivery target of at least doubling its 2024 volumes, aiming for 200,000 units. The company anticipates a significant ramp-up in the second half of 2025, driven by continued robust demand in Vietnam, a stronger international dealer and aftersales network, expanding charging infrastructure, and new model launches. The Green Series, including Limo Green, Minio Green, and EC Vans, is expected to contribute significantly to deliveries.

International expansion, particularly in Asia, remains a top priority. Sales in India are set to begin in Q3 2025, following the inauguration of its CKD manufacturing facility in Tamil Nadu in August. In Indonesia, the company is deploying charging ports and scaling its GSM ride-hailing service, with the CKD facility in Subang on track for technical SOP by the end of 2025. The Philippines market has also shown promising early traction, with VinFast capturing an estimated 25% market share in the BEV segment in H1 2025. While international markets constituted less than 10% of total deliveries in H1 2025, this mix is expected to shift with the ramp-up in Asia.

The company's technological roadmap, including the new vehicle platforms and zonal E/E architecture, is expected to drive meaningful cost savings and enhance customer experience, contributing to long-term profitability. VinFast will also debut two e-bus models for European markets in October, signaling its broader green mobility strategy.

Risks and Challenges

Despite its ambitious growth plans, VinFast faces several risks. Macroeconomic headwinds and evolving regulations introduce uncertainties in various markets. The company's aggressive expansion into new international markets, while offering significant growth potential, also entails execution risks related to establishing dealer networks, charging infrastructure, and brand awareness. The higher warranty provision rates observed in Q2 2025, typical for early production generations, are expected to normalize over time but represent a near-term headwind.

The transition from a direct-to-consumer to a dealer-led model in North America and Europe may incur additional impairment charges related to showroom closures. Geopolitical developments and potential tariffs, while proactively managed by bringing in inventory of unaffected model year '25 vehicles, could still impact sales in certain markets. Furthermore, while the e-scooter business is growing rapidly, its current loss-making status requires continued investment and careful management. VinFast's ability to achieve its ambitious localization targets, particularly for its new Vietnamese factory aiming for over 80% localization by 2026, will be crucial for cost optimization and mitigating supply chain risks.

Conclusion

VinFast is executing an aggressive yet calculated strategy to establish itself as a significant player in the global electric vehicle market. Its core investment thesis hinges on leveraging a vertically integrated green mobility ecosystem, a diverse and increasingly cost-efficient product portfolio, and a rapid, localized expansion strategy, particularly across Asia. The company's commitment to technological innovation, exemplified by its next-generation platforms and zonal E/E architecture, is poised to drive long-term cost savings and enhance its competitive edge.

While the path to full profitability involves overcoming initial gross losses and managing substantial capital expenditures for global expansion, the strong financial backing from its founder and Vingroup provides a critical foundation. VinFast's ability to maintain its market leadership in Vietnam and successfully replicate its ecosystem model in new Asian markets will be paramount. Investors should closely monitor the company's progress in scaling international deliveries, the realization of cost savings from its new technological platforms, and its ability to navigate competitive pressures and macroeconomic uncertainties, all of which will shape its trajectory toward becoming a self-sustaining global EV leader.