VinFast (VFS) Q4, full 2023 results: Rising revenues help offset missed delivery targets

After giving the public a glimpse of its Q4 2023 delivery targets last month, VinFast shared its full financial results for the previous quarter and year-over-year comparisons. Revenues are up, but the Vietnamese automaker will have to truly ramp up if it wants to reach its newly proposed delivery targets for 2024.

VinFast Auto ($VFS) remains a young automaker in the EV space, trying to make a global name for itself by expanding at a beyond-ambitious rate (sometimes to its financial detriment).

We have followed the Vietnamese auto brand of VinGroup from its inception, reporting on its continued expansion to new markets in the US, Europe, and India – all while continuing to introduce more and more EV models like the VF 3 compact SUV and most recently, an electric pickup concept called the Wild.

At the start of 2023, VinFast targeted 40,000 to 50,000 global EV deliveries. By Q3 2023, that quarterly total had reached 10,027 units, up 5.2% from 9,535 EVs in Q2. At the time, VinFast founder Pham Nhat Vuong shared that 60% of those Q3 sales (over 6,000) were to vehicle rental company Green and Smart Mobility (GSM) – a sibling recently established under the VinGroup umbrella.

In January 2024, we learned VinFast’s Q4 deliveries grew to 13,513 EVs, bringing the total to 34,855 for the fiscal year and landing well below the lower end of its 2023 targets. The company cited slow EV adoption rates in certain regions (who isn’t using that excuse these days?), but the full Q4 and 2023 reports tell a slightly more optimistic tale. Despite lower deliveries, revenue is up.

VinFast reports Q4 and total 2023 revenue growth

Per VinFast, Q4 revenue totaled $437 million, up 26% from the previous quarter and 133% YOY. Thanks to cost optimization strategies, the Vietnamese automaker also reported that profit margins have increased (negative 46% in FY 2023, compared to negative 82% in FY 2022), enabling higher revenue gaps.

For the entire fiscal year 2023, VinFast is reporting $1.2 billion in revenue, an increase of 91% YOY. Increased revenue is always a welcomed stat, but the miss on deliveries must be addressed, regardless of the excuses. Still, in true VinFast fashion, the automaker is doubling down (literally) and setting significantly higher targets for 2024. Per former VinFast CEO turned chairwoman of the board of directors, Madam Thuy Le:

2023 was a whirlwind of firsts for VinFast, culminating in a strong public debut. We launched exciting new products, expanded our distribution network, and solidified our presence in existing markets while opening doors to promising new ones. These moves laid a strong foundation for 2024, a year of global expansion and cost optimization. We’re already seeing positive signs in key markets like the U.S. and Indonesia. We’re not resting on our laurels. Fueled by this momentum and a recovering consumer sentiment, we’re setting an ambitious target of delivering 100,000 vehicles in 2024. This is a testament to our unwavering commitment to building a greener future for all.

VinFast shared that its gross loss in Q4 was $174.9 million and $551.6 for the fiscal year 2023.

Looking ahead, VinFast intends to balance revenue growth through cost optimization, including its cost of materials and EV production, all while trying to manufacture and deliver 100,000 EVs. Bold. In addition to continued production expansion in the US and entry into new global markets like Indonesia, VinFast has vowed to invest in markets closer to its native Vietnam. VinFast CFO Anh Nguyen also spoke to today’s Q4 report:

We saw favorable results in our business operations in the fourth quarter, with strong revenue growth and improved profit margins. We remain focused on enhancing investment performance and strengthening our balance sheet by reducing production and materials costs and strategically optimizing our global manufacturing CapEx. These initiatives will support our expansion efforts into high-growth markets like Indonesia and India and unlock the potential of these regions to drive substantial sales growth.