Good day, and thank you for standing by. Welcome to VinFast Second Quarter 2025 Financial Results and Q&A Webcast. [Operator Instructions]. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker, Ms. Amandae Baey, Vice President of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to VinFast Quarterly Earnings Call. Joining me today are Chairwoman of the Board, Madam Thuy Le; and our CFO, Ms. Lan Anh 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. SEC. 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. With that, I would like to invite Madam Thuy to start with the management remarks.

Good morning, everyone, and thank you for joining us today. It has been a while since we last spoke. I would like to begin with 3 important takeaways from the second quarter. First, our home market, Vietnam remains a pillar of strength, helping to drive another robust quarter. We ended Q2 with delivery growth of 172% year-over-year and revenue growth of 92% year-over-year. We are on track to achieve our 2025 delivery target, which is to at least double what we delivered in 2024. Second, we remain focused on international expansion with a strategy anchored around products, markets and manufacturing. Our manufacturing capacity has expanded with the inauguration of 2 new factories in Vietnam and India making significant progress in doubling our design capacity. At the same time, we continue to invest in R&D for our next-generation vehicle platform. Finally, our financial position has been strengthened with the spin-off of our completed R&D assets, and we continue to be backed by our founder and parent company. Before diving into the specifics, I would like to take a step back and look at the global EV landscape. Macroeconomic headwinds and evolving regulations have introduced greater uncertainties in some markets, while in others, supportive policies are accelerating adoption and intensifying competition. VinFast is not immune to these changes, but our long-term vision remains firmly intact, that is to be a global leader in electric mobility. We continue to see strong momentum in our business, supported by the expansion of our green mobility ecosystem internationally and regulatory tailwinds driving EV adoptions in our home markets. To capture these opportunities, we are making deliberate investment in R&D and customer incentives to drive adoption. These are strategic choices to reinforce our long-term position in core markets. With that, let me begin with our delivery recap…

Thank you, Madam Thuy, and hello, everyone. As Madam Thuy explained, we see tremendous opportunities in our core Asian markets, underpinned by raising consumer awareness and supportive government policies for electrification. To capture this momentum, we are accelerating our investments in promotion campaigns and customer incentives. These initiatives are essential to building long-term brand equity and market share. At the same time, we remain committed to investing in R&D to advance our product road map. Now let me walk you through our result in more detail. The company's strategy in Q2 2025 continued to focus on driving top line growth. As a result, total revenue reported USD 663 million, representing a 92% year-over-year increase and a 2% quarter-over-quarter gain, driven by an increasing EV sales volume in Vietnam. Within our product portfolio, the VF 3 sustained its strong momentum, emerging as the best-selling car in Vietnam's auto market during the first half of 2025. Our second best seller, the VF 5 delivered a solid 35% year-over-year increase in the sales volume, while the VF 6, our raising Electric B-SUV posted an impressive 297% year-over-year growth. Cost of goods sold for the quarter was USD 935 million, an increase of 66% year-over-year and 6% quarter-over-quarter, reflecting the continued ramp-up in deliveries. Gross margin was negative 41% in the second quarter of 2025 compared to negative 63% in the second quarter of 2024 and negative 35% in the first quarter of 2025. The improvement in gross margin over the second quarter of 2024 was attributed to increased sales and improved costs. The decrease in gross margin compared to the first quarter of 2025 was primarily driven by the higher warranty provision rates, an increase in cost of vehicles sold, excluding sales reduction relating to free charging, NRV and other. Gross margin was…

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. We will now take our first question from the line of Andres Sheppard from Cantor Fitzgerald.

Madam Thuy, just curious if you can maybe give us a little more color on the cost discipline efforts that you're putting in place. I noticed that margin came a little bit below the previous quarters for this time. How should we think about that cost discipline for the second half of the year and into next year, particularly, how should we think about gross margins and blended ASPs for the second half and into next year?

Nice talking to you again. Well, I think on the -- over the past few quarters, as you can see, we delivered meaningful BOM cost savings, so about like 16% reduction in Q4 2024 and another 11% in Q1 2025. In Q2 2025, the mix was more concentrated on models like the VF 3, VF 5 and VF e34 with the most optimization that has already been realized. So further savings this quarter were more limited until we move on to the new platform. So looking ahead, we see a greater potential in upcoming versions of VF 6 and VF 7. This will be produced on our new vehicle platform as we talked it about before, which will benefit more from the optimized design and in-house battery production and deeper collaboration with suppliers. So yes, while the higher volume certainly give us more leverage on pricing, our cost efficiency don't just come from just scale. They've been driven by technology innovation, long-term partnerships with suppliers and just other factors to improve on the BOM cost as well. So depending on the mix, it could be different quarter from quarter.

Got it. Okay. That's super helpful. And just as a maybe a quick follow-up. So you've reaffirmed your outlook to more than double sales this year versus last year, which is great to see. Just curious if you can maybe help us understand where is the second half growth going to be coming from primarily? Is it continued penetration in Vietnam? Or is it India, Indonesia, Philippines? How should we think about that growth for the second half?

So we're very confident we are on track to hit our 200,000 unit delivery target. Historically, the first half of the year makes up less than 30% of annual volume. And as you recall, last year, it was only, I think, like 22% of 2024 volumes. This is largely because of seasonality in Vietnam, where the consumers tend to hold back big-ticket purchases earlier in the year. But even with that seasonality, our growth has been strong this year versus last year. And looking forward, we expect a significant ramp-up in the second half, supported by a few key drivers, continued very robust demand in Vietnam, a stronger dealer and aftersales network internationally and also the rollout of charging infrastructure, new model launches like VF 6, VF 7 as well as a growing fleet sale to like GSM and other transport operators. On top of that, we will be expanding our Green Series with the model like Limo Green, Minio Green and other EC Vans, and we are seeing quite a lot of demand for this -- for the Green Series as well.

There are no further questions from the phone lines at this time. I'll hand back to the room for questions on the webcast.

Thank you, operator. We have a question from the webcast. Could you elaborate on the next impact -- on the impact of next-generation platforms on margin improvement and help quantify the contribution? Ms. Lan Anh will answer this question.

Yes. In August, we delivered the first Limo Green, our new entrant into the MPV segment with novel vehicle platform and the EE 2.0 architecture. The feedback so far has been positive. And due to the recency of the product launch, we are in a position to disclose the margin impact. However, the next-generation vehicle platform are expected to drive meaningful cost savings like Madam Thuy just mentioned. Moreover, it also drives a significant improvement in customer experience. The OTA update time is cut from hours to less than 1 hour with more reliable remote updates via high-speed Internet protocol linking our key components. We are also working on the new vehicles in the pilot to hit the market in the coming months, such as like Minio Greens and EC Vans.

We have the next online question. Please give more color on the impact on gross margins in Q2, specifically on the higher warranty provision rates and the increase in the cost of vehicles sold for which revenue has been deferred. Ms. Lan Anh, would you like to take this question?

Yes. To recover our gross margin was negative 41% in Q2 2025 compared to the negative 35% in Q1. However, if we exclude sales reduction related to the free charging program, the impact of NRV at the cost of vehicles sold for which revenue has been deferred and other provisions. Gross margin was minus 20.9% in the Q2 2025 compared to the minus 19.3% in the Q1 2025. The higher warranty provision during the period is typically -- I mean, in the early years of the first production generation, we expect this to go down and align with the industry benchmarks as our product [major]. We recognized cost of goods sold for a small number of vehicles already delivered under customer contracts, while the revenue recognition will occur in the subsequent periods once contractual acceptance milestones are met. This accounting treatment reflects a timing difference rather than an economic loss.

Operator, can we check if there are any questions on the line?

We currently have no further questions from the phone line. [Operator Instructions]

Thank you, operator. Our next question is regarding our e-bus business. Can you share your plans for the e-bus business? And should we expect the overseas e-bus business to be a meaningful driver for VinFast? Madam Thuy, will you take this, please?

So last quarter, we shared that we plan to expand VinFast e-bus presence into Asia and Europe. I'm happy to announce that we also just hired a new person to head e-bus business in North America. We have since received a lot of inbound interest from international partners, which reflects the attractiveness of our products. That said, our overseas e-bus strategy is still in early stage, and we haven't disclosed any specific targets here. This year will be mostly on starting the business. But as an update, we will debut 2 e-bus models for European markets at the Busworld Brussels. So the press conference will be on October 4, 2025. Please help us spread the word out if you can. And I think we're starting with European market because it's particularly very promising for us as well. But looking ahead, we think that e-bus business will evolve as part of our broader green mobility strategy. And we'd be happy to report more in the coming quarters.

Thank you, Madam Thuy. Our next question is regarding e-scooters. What percentage did this segment contribute to first half 2025 revenue and gross loss? How many units do you target to deliver in FY 2025? And what is the current production capacity and expansion plans for the e-scooter business? Ms. Lan Anh, would you like to take this question?

For the first half, the contribution, a small percentage compared to total. We will disclose in its full financial statement on the Form 6-K letter. For the guidance, while we do not provide the guidance for e-scooter this year, we expect a substantial increase in delivery for the rest of the year. This is a continuation in the strong sales momentum year-to-date. This is -- also thanks to the favorable government policies for further accelerate EV adoption and VinFast's ongoing efforts to support this transition in the very early move in the green mobility.

Thank you, Ms. Lan Anh. The next question on the line, what is the expected time line to launch the VF 6 and VF 7 in North America? Madam Thuy, would you like to take this?

Well, we are in the middle of preparing our 5-year plan for North America. I think things are still moving. We do have the -- at least the VF 7 for the plan, but we would like to address this topic probably at the end of the year.

Thank you, Madam Thuy. And there's a follow-on question about the e-scooter business. So this quarter, 2-wheeler deliveries far exceeded EV growth. Does the company plan a structural shift in this business model? Or do you still expect 4-wheelers to dominate long-term revenue? Madam Thuy or Ms. Lan Anh, would you like to take this question?

Well, it's not really a structural shift per se because the average selling price for the e-scooter is a lot lower than the EVs. However, we did see a significant pickup in Vietnam for e-scooter. This just reflects the market dynamics where in Vietnam or in Southeast Asia in general, the motorbikes are a lot -- the motorbikes sold each year a lot higher than vehicles. So in Vietnam, in particular, it's about over 3 million motorbikes are sold annually versus about to 400,000 cars. And what is interesting is the consumer in Vietnam are showing strong readiness to switch from gasoline motorbikes to electric scooters and also this certain shift in regulation as well that are driving this movement to greener transportation. So going forward, we still believe that the 4-wheelers will remain the longer-term revenue drivers. However, e-scooter, electric buses will be adding more to the revenues going forward.

Thank you, Madam Thuy. The next question is regarding the warranty margin drag, which impacted Q2. And should we expect this to be a headwind in the back half of 2025? Lan Anh, would you like to take the question?

Yes, sure. The Q2 margin impact was mainly an effect that's very common with the first product generations. With the ongoing design upgrades, more major manufacturing processes and stronger aftersales support, warranty costs are expected to trend down over time and normalize closer to the industry levels. So we don't see it like a sustained headwind in the back half of 2025.

Thank you, Lan Anh. The next question on the line is regarding deliveries in the foreign markets. Of total deliveries in the foreign markets, what proportion was to related parties? Ms. Lan Anh would you take that question, please?

So for the related party transaction that we disclose for the global level, not just specific for the foreign market. So across the market of the first half of 2025, the overall, our B2C deliver -- actually, if we accounted for the consecutive fourth quarter through Q2 2025, that accounted for the over 70% of the total delivery. Yes.

Thank you, Ms. Lan Anh. Out next question is regarding an update on our factories in India and Indonesia. Madam Thuy, please?

In Vietnam, as you probably saw from the news, we opened the factory in Ha Tinh at the end of June. And the factory has a capacity of up to 200,000 compact EVs. And we're building models like VF 3, the EC Van on a very flexible line. In India, in early August, we opened the factory in Tamil Nadu with the initial capacity of 50,000 units per year and scalable to 250,000 units per year. We are producing the VF 6 and VF 7 for India as well for export from the factory. In Indonesia, the construction at Subang factory is progressing well, and we target to open by the end of the year as well.

Thank you, Madam Thuy. Our next question is regarding the green mobility ecosystem. How is that rollout progressing internationally?

I think in the previous quarter, we discussed our strategy -- taking the strategy from Vietnam, where we're rolling out not just VinFast vehicles, but the whole green ecosystem and bringing it to other markets. So I'm happy to report that we started doing that in the markets closer to us. In Indonesia, GSM has already scaled quickly since our launch late last year. We have about 3,000 cars on the road today. The utilization rate is running at about 95%. And with our recent partnership with Gojek, that give us a broader reach to the customers. On the charging side, V-GREEN in Indonesia is targeting about 63,000 charging portal in the country by end of 2025. In the Philippines, GSM is the first fully foreign-owned taxi operator. We offer fares as well as traditional taxi and about 1/3 of other platforms at peak hours while also giving drivers better income and benefits. So currently, we have about 500 taxi in Metro Manila, supported by 2 depots and about 100 charging stations either live or under development. V-GREEN is working on the target to have about 15,000 charging points in the Philippines by the end of 2027. In India, it's still early for us, but V-GREEN already established the company there and is looking for partners. And GSM is also exploring to enter India in -- very, very soon.

Thank you, Madam Thuy. We have a few more questions from the line. How has the feedback been from consumers around the company's buyback program on returned vehicles? And how do you expect that to change in the medium term?

Okay. I think the buyback program has helped build consumer confidence in EV adoption. But given the strong value proposition of our vehicles, we expect customer will have written reason to exercise it and its relevance will naturally diminish over time.

Thank you, Madam Thuy. Our next question is regarding our positioning in India. Why has VinFast initially launched the VF 6 and VF 7 in India while choosing VF 5 and VF e34 for the Indonesia market? Please give more colors on the key differences for these 2 markets.

I think we're announcing India in the next few days. I'm kind of holding that for the announcement and not to talk about it yet. But I think with Indonesia, it's quite -- from socioeconomic standpoint, it is quite similar to Vietnam, so our approach has been so far very similar to how we roll out in Vietnam. So wait for few more days, and there will be an announcement -- exciting announcement about India.

Thank you, Madam Thuy. Our next question is regarding product lines, certain product lines, which have already reached normalized gross margins? And how should we think about the BOM cost trends going forward? Will scaling volumes be sufficient to offset pressures from the higher-end products?

Lan Anh?

Yes. On a normalized basis, excluding the NRV provisions, exceptional items and a noncash like depreciation and amortization, our VF 3 and VF 5 models are already gross margin positive. For high spec models like VF 6 and VF 7, we focus on improving margins through platform simplification, supplier resourcing and localization. As a volume scale, we expect to see the sequential improvements. From an offshore perspective, we anticipate a normalized gross margin turning positive at scale and localization fully take effect. We will continue to update you on that progress each quarter.

Thank you, Ms. Lan Anh. Our next question is actually regarding e-scooters. VinFast has announced new measures to accelerate e-scooter adoption, such as offering free charging and working with financing partners. How should we think about the financial impact of these initiatives?

For the -- our e-scooter business, the e-scooter business is still loss-making, and we expect that to continue in the near term as we roll out adoption support measures. For example, in July, we signed a cooperation agreement with the 12 major banks in Hanoi. Under this program, buyers receive a 10% discount on VinFast e-scooter. Pay just 10% upfront and enjoy free charging at the V-GREEN public station until May of 2027. For the profitability for e-scooters remain a long-term goal. Right now, the focus is on the making electric 2-wheelers more accessible and aligning with Vietnam's green mobility agenda. While we don't provide specific delivery guidance for e-scooters, it is reasonable to expect volume to remain materially higher than our 4-wheeler business in the coming years.

Thank you, Ms. Lan Anh. Our next question is regarding the decision to reintroduce battery leasing in Indonesia. How does bringing back battery leasing impact the company's pricing in Indonesia? Madam Thuy, would you like to take this?

Well, I think if you've been following VinFast, you remember that at the beginning, we offer battery leasing in Vietnam for the first few years, and we just phase it out recently. Battery leasing allow the consumer to adopt EV faster because the up-front payment is lower than the gasoline car as well as the monthly payment is less than the gasoline consumption for the vehicle and total cost of ownership will be lower. So when we first introduced, about 95% of our customers chose this option. Gradually, when customers get more familiar with EVs in the market like Vietnam, for example, and more comfortable with EVs, then we phase it out. So we're doing the same thing in Indonesia right now, and we believe that it's going to have a similar impact like it did in Vietnam. By offering battery leasing, we are building a broader customer base, accelerating EV adoption and also strengthening our foothold in Indonesia, which is one of the Asia's fastest-growing EV markets.

Thank you, Madam Thuy. On the note, the follow-up question on the line is regarding the competitive intensity in our core Asian markets? And how long do we anticipate running promotional campaigns? And are these promotional campaigns in response to competition in the region?

Competition is good for our consumers, right? So that's what we're facing in every market. But competition is indeed very strong across Asia, and that is to be expected with how quickly EV adoption is accelerating. Our promotions are just like reaction. They are deliberate strategy to build awareness and accelerate adoption, especially in early stages of entering a market. For example, we just introduced the battery leasing in Indonesia, as I mentioned before. We partner with the banks to offer 0% interest financing and run selective cash discount on zero down payment program, for example. But that said, our differentiation goes beyond just pricing. We are investing heavily in building the full ecosystem, expanding the V-GREEN charging infrastructure with local partners and growing GSM ride-hailing fleet. Over time, as we gain scale and as our ecosystem matures, we expect promotions to normalize and the ownership experience with strong warranty, excellent aftersales and good registered value will become the real driver for consumer confidence.

Thank you, Madam Thuy. And the follow-up question is regarding how international sales is tracking?

In the first half of 2025, international markets made up less than 10% of our total deliveries, which is similar to last year. The mix has shifted though. Today, Indonesia and the Philippines are the main contributors, whereas last year, it was U.S. and Canada. We are seeing encouraging progress. In the Philippines, VinFast captured 25% share of the battery -- the BEV segment in the first half. And in Indonesia, about 5% of our quarterly delivery came from there -- from Indonesia, mostly led by VF 3, which was recognized as the best EV City Car. Sales in India are set to begin in Q3. So looking ahead, we are building scale across Asia with 3 key priorities. First, we're rolling out the full Green mobility ecosystem with GSM ride-hailing and with V-GREEN charging network. Secondly, we're making EVs more accessible through expanded product offerings and strong financing partnerships. And finally, we're working closely with the government and partners in the Philippines, India, everywhere to push the green transition in those countries.

Thank you, Madam Thuy. And our last question on the line is regarding what drove the higher cash balance this quarter and what is the outlook for cash burn through 2026 and 2027. Ms. Lan Anh, please?

Yes. Thank you. The high cash balance mainly reflects the financing inflows of about USD 1.2 billion, which more than offset operating outflows of around USD 463 million and investing outflow of around USD 305 million. This created a net uplift of roughly USD 500 million. The key driver of new term loan agreement with the Dutch Bank AG and SeaTown Holdings at the end of the first half of 2025. For looking ahead, we expect operating outflows of USD 400 million to USD 600 million per quarter in the near term. This is tied to having operations investment in the -- our overseas plants, R&D for the next-generation models and broader global operating costs. Over time, we expect that this to improve as operating leverage builds and margin strengthen. On liquidity, as I mentioned earlier, as of the 30th of June, our liquidity stood at USD 4.2 billion, which includes cash and cash equivalents combined with the USD 1.6 billion that we expect that the cash -- going to be like that the cash proceeds from the recently announced completed R&D assets are spin-off transaction. I mean the Novatech and the remainder of the fundraising commitment from Vingroup, our founder and ELOC facility. Also, we are well supported by project financing from our Indonesia and India plants, assisting bank loans. So together, this provides with ample runway to execute growth strategy through 2026 and 2027.

Thank you, Ms. Lan Anh. Operator, that concludes our Q2 earnings call. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.