Good day, and thank you for standing by. Welcome to the VinFast Auto Ltd. Q4 2024 and Full Year Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. Press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I will now like to hand the conference over to your speaker today, Nhi Nguyen. Please go ahead.

Thank you, Operator, and good morning, everyone. This is Nhi Nguyen from VinFast Investor Relations. Welcome to our fourth quarter earnings conference call. Joining me today are Chairwoman of the Board, Madame Thuy Le, and our CFO, Lan Anh Nguyen. During the call, we will discuss our fourth quarter performance, business update, and present our outlook for 2025. After management remarks, we will have thirty minutes for Q&A. We will also reference a slide deck today, which is accessible on the IR website. Before I turn over to Madame Thuy Le, 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, macroeconomic, 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 in our most recent filings with the US Securities and Exchange Commission. In addition, management will refer to non-GAAP financials during this call. A discussion of why we use non-GAAP and information regarding the reconciliation of our non-GAAP versus GAAP is available in the press release that we issued this morning. You can also find it in our slide deck. And with that, I would like to invite Madame Thuy Le to start with management remarks.

Thank you, Nhi. And hello, everyone. Thank you for joining us today. I am thrilled to discuss VinFast's outstanding Q4 and 2024, which was a year full of achievements that have set VinFast up well for 2025. It was a good year in which we exceeded our delivery target, established our market leadership in Vietnam, expanded to new markets, and made progress on our path to profitability. Before I recap the year, I would like to take the opportunity to address the events that are currently reshaping the global trading landscape, which will continue to take shape before stabilizing. Here at VinFast, we remain agile to the changes in the regulatory and geopolitical landscape. Our vertically integrated manufacturing capability and high localization rate are key competitive advantages of VinFast during this uncertain period. At the same time, we are taking proactive steps to safeguard and sustain sales performance, including strengthening customer and dealer engagement, optimizing go-to-market strategies, and reinforcing brand awareness. We are focused on building greater products, investing in innovation, and ensuring that the customers get high-quality, affordable EVs. We are keeping our 2025 guidance, and we continue to evaluate and be flexible as the landscape evolves. Let us now look back at 2024. We ended 2024 with a total delivery of 97,399 EVs globally, exceeding our 80,000 delivery target. Q4 2024 saw a steep ramp-up in our output, where we set a new monthly delivery record for every month in the quarter. VinFast continues to reshape customer behavior through a diverse vehicle lineup, a first-of-its-kind green mobility ecosystem, and pioneering incentives, including a free charging program in Vietnam. 2024 also saw important progress in our international expansion, as non-Vietnam sales grew 10 times year over year, increasing contribution from 3% to 10% of our total deliveries. We also…

Thank you, Madame Thuy Le. Despite a challenging macroeconomic backdrop, VinFast concluded 2024 with strong operational momentum, laying a foundation for further growth in 2025. As a young and dynamic EV manufacturer, we need to focus on continued innovation to build better quality and better performance vehicles. At the same time, we are streamlining our operations and managing costs carefully to support our revenue growth and progress towards profitability. To support our Asia growth, we plan to strategically deploy capital into three new CKD plants that are scheduled to begin operation in 2025, further strengthening our production flexibility. Now let me recap our 2024 performance. Revenue for Q4 2024 was $678 million, up by 34% quarter over quarter and 70% year over year. Full-year revenue was $1.8 billion, increased by 58% year over year. Cost of goods sold in Q4 2024 was $1.2 billion, increased by 93% quarter over quarter as volumes ramped up significantly. Full-year cost of goods sold was $2.8 billion, which increased by 67% versus 2023. Q4 2024 gross margin was minus 79% versus minus 24% in Q3. The pressure on this quarter's gross margin was due to an accounting charge that we booked in relation to the free charging program in Vietnam. Mr. Pham is responsible for paying the cost to implement the program for the EVs sold on or before December 31, 2024. The estimated amount to be paid directly by Mr. Pham for the entire recharge period is approximately $242 million. This amount is recognized as a revenue deduction and a deemed contribution to the owner in our financial statements for fiscal year 2024. Therefore, we need to book an adjustment on revenue corresponding to the charging benefits of all EVs sold on or before 12/31/2024. If we remove the impact of the free…

Thank you. As a reminder, press one on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. We kindly ask you to limit yourself to one question and one follow-up per person. We will now take the first question from the line of Andres Sheppard from Cantor Fitzgerald. Please go ahead.

Hi, everyone. Good morning or good evening. And thank you so much for taking our questions, and congratulations on the quarter. Hey. Just a first question is, so you are reaffirming your guidance for 2025 for now. I guess, you know, what gives you confidence in your guidance so far just given all of the macro conditions? And how should we think about deliveries for '25 in terms of, you know, Vietnam versus other markets like India, Indonesia? You know, what kind of breakdown should we be thinking about? Thank you.

Hi, Andres. How are you doing? Thank you for the question. So in terms of the confidence for the guidance, very similar to 2024, we expect that Q1 is going to be the slowest quarter. So we announced about 35,000 deliveries in Vietnam in Q1. Then we expect some uptick in Q2 as two of the new green models will start delivering towards the end of the quarter. And then the bulk of the 45,000 green non-cancelable preorders that we just received will start hitting in the second half of the year. So, overall, we think that the first half contribution would be approximately 25-30%. And then you will see most of the rest of the deliveries in the second half of the year with Q4 again being the strongest quarter. So we see good results from the orders for the green series in 2025. And in the first quarter this year, we already exceeded the first half of last year. And we continue building the momentum in Vietnam and in other markets. So basically, I mean, looking at Vietnam and other markets, we have confidence that we should be able to deliver at least double what we did last year. In terms of the breakdown between Vietnam and other markets, we expect that other markets will contribute more than 10%, similarly to last year. Yeah. So we had Indonesia, and we expect Indonesia, Asia market, Indonesia, Philippines, India will contribute quite significantly this year. Thank you.

Wonderful. Thanks, Madame Thuy Le. That's super helpful and super thorough. Really appreciate it. Just one last question. Just on gross margins. Can you remind us the path to positive gross margins? It seems like most sales for this year will probably be the VF3 and VF5 again. So with lower ASPs, you know, how should we think about the path to positive gross margins? Thank you.

Yeah. As for the gross profit margin, actually, 2024 marked significant progress in our scale, strategic execution, and it's an encouragement to our path to profitability. VinFast also ended the year with strong momentum, having more than double quarterly revenue year over year. So excluding the NAV and one-off accounting charge, we have narrowed our full-year gross loss margin to minus 32% from minus 40% in 2023. So in 2025, we are focused on scaling volume through the new product launches and deepening our market presence in Asia. At the same time, we are executing against clear levers for BOM optimization, manufacturing efficiency, and strategic capital deployment to drive margin improvement and move towards full-year EBITDA profitability. Yep.

Perfect. Thank you so much again, and congratulations on the quarter. I'll pass it on.

Thank you. Thank you. We will now take the next question from the line of Greg Lewis from BTIG. Please go ahead.

Yeah. Hi. Thank you, and good evening, and good afternoon, good morning. Hey, I was hoping to understand a little bit better the accounting treatment or how you are realizing the EV charging credit. It sounds yeah. 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 charging's in place for a couple of years, it's realized over the life of the three-year window.

So for the free charging program, actually, during Q4 2024, we have the one-time charge recognized in Q4 to account for the free charging expenses for all EVs that we sold on or before 12/31/2024. So you can see that we recognize $242 million deduction in the revenue. This is in line with the US dollar accounting treatment that we need to deduct from the revenue. And because Mr. Pham, our founder, is responsible for this charging spend, but we increased for the daily contribution from the shareholder. So that's why you do see the one-time charge big amount in Q4 2024. Going forward, it's expected that this cost is going to be recognized in line with the correct funding, the vehicle sales for the duration of the free charging program that we are offering to customers. Currently, under our sales policy, the free charging program is going to end on December 31.

Okay. Great. And then when we think about, you know, ASPs and mix, you know, I mean, I guess the focus is going to be on the VF3 and VF5. So, how should we think about the ASPs trending in 'twenty for the rest of the year? How are you guys thinking about that on pricing?

Yeah. You are correct that actually with the increasing of the VF3, VF5 heavily in our mix in Q4. So ASP is around $16,000 per car. It's kind of the average in Q4. That compared to around $20,700 in Q3. This actually for the decline of over 22% in the ASP. So also driven primarily by the VF3, VF5. And overall, in 2024, the ASP is around $19,300 per car. We expect that we see the ASP in the low range during the early adoption stage, where customers tend to prefer small cars with a low price tag to explore and experience. However, the ASP is only one part of the equation. The part is unit growth. So our objective to introduce more affordable models is to capture possibly underserved cohorts, consumers that prioritize value in both the Jonathan's and the environmental impact. So, ultimately, strong unit growth should offset the ASP decline and lead to sustainable revenue growth.

Super helpful. Thank you for taking my questions.

Thank you. We will now take the next question from the line of James McRae from Chardan Capital Markets. Please go ahead.

Yes. Thank you. When we look at capital spending for 2025 and 2026, are the amounts that you've budgeted similar to what you spent in 2024? Or significantly higher or lower?

So you refer to the investment. So we can, like, enter into our cash burn. I just like a heavy number that in 2024, we have the cash burn of $1.9 billion. And we expect that in 2025, approximately around $2.5 billion. Out of that, we expect to spend $1.8 billion for the CapEx and R&D. And the CapEx here is for our CKD facilities in Asia, which we expect to be operational in 2025. And for the R&D, around most CapEx and OpEx is around $700 or $750 million. So the cash burn from operation is reducing. The cash burn for the operation is around $800 to $900 million. That's the last one. Yeah. Slightly reduced focus last year.

Thank you. And secondly, when we evaluate the share of sales coming from the VF3 and VF5 in 2025, is that going to be approximately similar to what it was in Q4 of 2024?

Please standby, your conference will resume shortly. And I've told you to let me see. Think it's less than 50%. Because we have the green coming in as well. Yeah. To less than Q4 last year.

Okay. I hate to do this to you, but the conference blanked out during your answer. So if you can just Or the answer is answer is. Sorry about that. The percentage of VF3 and VF5.

This year is expected to be less than 50%, which is less than Q4 last year. But we also we're getting we're adding the green series. This year, so that would account for almost a quarter of the deliveries for this year as well.

Very good. Thank you so much.

Thank you. Thank you. There are no further questions on the phone at this time. I would like to hand over for any webcast questions now.

Thank you, Operator, and thank you, Madame Thuy Le and Lan Anh Nguyen. We have the first question from the webcast. With the target to at least double volumes in 2025, what percentage do you expect international markets to contribute? I think this we have already addressed this. So let's move on to the next one. With the recent announcement of shifting focus, and not boosting US, Canada, Europe sales, what does that mean to the current owners, dealerships, and service centers? What is the update on the routine NHTSA investigation?

Okay. Let me take it. So the first question is about the reactions to the US, Canada, and Europe sales. So our dealers in the market remain strategic partners and continue to play a vital role in our growth and market execution. So across all the markets, we are transitioning to a dealership model to enhance efficiency and scale. This shift enables cost optimization for us while expanding our reach faster, particularly in high-potential regions where the demand pipeline remains strong. So, you know, while the recent headlines have prompted increased caution among some of the dealers, sentiment remains quite constructive in Asian markets as we build brand momentum. We had proactively aligned supply with demand, a set of accelerating shipments ahead of tariff implementation in the US, to ensure dealer delivery is well-positioned for the summer season as well. So, so far, so good that we manage the relationship well with the strategic partners. On your second question, about the NHTSA investigation, as we have repeated many times, safety is an important aspect to us. And we are cooperating with the investigation by NHTSA as we have always been in the past. NHTSA generally does not close this type of investigation. They take no further action so long as VinFast continues to honor its commitments in terms of the settlement. So we continue cooperating with them. So far, no feedback for the past few months.

Thank you, Madame Thuy Le. We have the next question from the floor. What is the current status and projected plans for the USA manufacturing plant in North Carolina?

Thank you. So the US remains one of our key markets, and we are committed to it for the long term. This is reflected in the fact that we have made no changes to our plan to have a North Carolina facility by 2028. We will continue monitoring the macroeconomic and geopolitical developments and revise our plan if needed. With the current market backdrop, it has also provided us with an appropriate window to adjust our execution focus. So we are also focused on fostering dealer performance and expanding our dealer pipeline across the US. We thank our dealers for their cooperation and support and continue to have meaningful dialogue as we work together through the macro uncertainty. So thanks. We really thank them for that.

Thank you, Madame Thuy Le. We have the next question from the floor. How is the expansion into Indonesia and The Philippines progressing?

Very well for both markets. We actually are very, very pleased with the progress in both markets. For Indonesia, we started delivering VF3, VF5, and VFE34. We have delivered about 3,000 VFE34 for GSM and about 500 vehicles for B2C customers in the market. Indonesia is the first real fast overseas market outside of Vietnam, where we implement the whole full green mobility ecosystem, which means the GSM for the green taxi and VGreen for charging stations. We launched GSM in Jakarta last year and ended last year. And we started expanding the VGreen charging network in Indonesia. Our dealership network consisted of 22 showrooms as of 03/31/2025. And we are on track with our target to have about 80 showrooms by the end of the year as we continue expanding our relationship with the dealers. About the Philippines, we have introduced five models in The Philippines with the VF6 being the latest one to be introduced. We also started expanding our dealership network and service center. We have six showrooms by March and aim to have 50 showrooms by the end of the year. And the VGreen charging station network is already present in The Philippines. And we expect to see GSM taxi in The Philippines soon as well.

Thank you, Madame Thuy Le. We have the next question. It's about tariffs. What is your view on the potential impact of the new US tariff on consumer car spending, both in Vietnam and in your key international markets? How is VinFast preparing to respond for each market, and what forms of government support are you expecting?

The government support in Vietnam okay. Okay. In Vietnam. Vietnam. It's from the analyst in Vietnam. Okay. So I guess the tariff reciprocal tariff is the most popular keyword these days. I think we are closely monitoring and believe that at this stage, it remains premature to determine the final trajectory of the tariff, as further developments and influencing factors are yet to unfold. We have proactively brought in inventory of model year '25 vehicles to North America, which are unaffected by the new tariffs. And we have sufficient inventory in the interim. In 2024, the US accounted for only 4% of total deliveries. And so we believe that the impact of the US tariffs on automotive, I mean, we are impacted only by automotive tariffs for now, not the reciprocal one. So we expect that the impact of the US automotive tariffs on us is less severe compared to other OEMs with heavy reliance on the US market. Our 2025 guidance announced in February already took into account potential political and economic uncertainties in the US. And it is important to highlight that the majority of our growth in 2025 is expected to be from non-US markets. We don't expect government support in Vietnam, even though I think in Vietnam, we do have, like, some waiver of some registration fees. But we don't expect, at least it's not in our projection, to have any government support in any meaningful way.

Thank you, Madame Thuy Le. We have the next question from the line. In the past, VinFast has talked about battery leasing as a unique differentiator of your market entry. Can you explain the rationale to discontinue this offering?

Okay. I talked about it a little bit in my earlier speech. Right? So battery leasing played a vital role in the early days of EV adoption, as it really helped narrow the price gap between internal combustion engine vehicles and EVs. But as consumer familiarity with EVs grew, battery leasing as a percentage of sales has dropped for us from 80% at the beginning to about 30%, below 30% recently. So it's just the right time for us to drop the battery leasing. And to ease the transition, we extended free charging benefits to the customer. So six months for EV owners and one year for e-scooter owners through 2027.

Thank you, Madame Thuy Le. We have the last question from the line. Can you remind us what are VinFast's key priorities for 2025 and how that aligns with your go-to-market strategy? And what are you most excited about for VinFast over the next twenty-four months?

Thank you. So the priorities for us in 2025, first of all, solidifying the leadership position in Vietnam and continuing to build brand awareness and strengthening performance and presence in new markets. Secondly, to employ enhanced CapEx manufacturing to support business growth. We're opening three more factories this year. And then finally, driving product innovation through segmentation and, again, focus on cost optimization. So our go-to-market strategy is built around three pillars: products, manufacturing capacity, and market reach. And these are all aligned with our 2025 priorities and long-term goals. Well, what's exciting about, I mean, exciting development at VinFast. Our engineering fund, we wouldn't be launching new vehicle platforms this year to simplify and increase platform commonalities across the models. So this will internally lead to more cost savings. And we are also working hard on new technologies and we'll share more details with you later. So all in all, the path ahead of us is very clear. I'm very excited about the future of VinFast.

Thank you, Madame Thuy Le. I think we are coming up to the one-hour mark, and thank you everyone again for joining us today. If you need any further clarification, please let us know by sending an email to ir@vinfastauto.com. Take care, and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.