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VinFast\u2019s revenue growth is fast, but the electric-vehicle maker\u2019s costs grow faster.\u00a0<\/p>\n
Vietnam\u2019s Tesla<\/a> challenger is building a $2 billion manufacturing plant in North Carolina, is poised to break ground on another in India\u2019s Tamil Nadu, and has yet another planned in Indonesia<\/a>.\u00a0<\/p>\n This week, VinFast reported a net loss<\/a> in the fourth quarter of $650.1 million, up 3.4% from the previous quarter. For the full year, VinFast\u2019s net loss reached $2.4 billion, up 14.7% from 2022.<\/p>\n On the other hand, revenue grew significantly, jumping 91% to $1.2 billion last year from 2022, and the company plans to deliver 100,000 cars this year, up from nearly 35,000 last year.<\/p>\n VinFast is part of Vingroup, a conglomerate led by Pham Nhat Vuong, Vietnam\u2019s richest man<\/a>. The carmaker launched in 2017, producing traditional gas-powered vehicles before pivoting to EVs only<\/a> five years later.<\/p>\n It began selling its VinFast VF8 in the U.S. last March, but critics panned<\/a> the vehicle, citing inconsistent handling and poor performance.\u00a0<\/p>\n Despite that, the company\u2019s shares surged 504%<\/a> over a six-day period after its IPO in August 2023 on the Nasdaq<\/a>. VinFast\u2019s market cap briefly exceeded\u2014before a dramatic plunge<\/a>\u2014that of Ford, Volkswagen<\/a>, and General Motors<\/a> combined.<\/p>\n From a peak of about $190 billion, the company\u2019s market cap now stands at just $11.7 billion.\u00a0<\/p>\n One issue with VinFast shares has been that Vuong owns nearly all of them, with only about 2% currently available for investor purchase. This means even tiny shifts in volume can trigger large price movements. VinFast said last month it plans to increase the<\/a> shares available to 10% to 20% by year\u2019s end.<\/p>\n Of course, VinFast isn\u2019t the only EV maker struggling to turn a profit. Sales growth of EVs, while still strong, is slowing in the U.S. and other markets.<\/p>\n This week, Rivian announced<\/a> a disappointing fourth quarter and outlook, saying it would cut its salaried workforce by roughly 10%. Tesla CEO Elon Musk said his rival should \u201ccut costs massively\u201d<\/a> to survive, adding: \u201cTheir product design is not bad, but the actual hard part of making a car company work is achieving volume production with positive cash flow.\u201d<\/p>\n Even Tesla has warned<\/a> of \u201cnotably lower\u201d sales growth this year after a disappointing fourth quarter, and it was recently surpassed in global EV sales by China\u2019s BYD<\/a>. Backed by Warren Buffett\u2019s Berkshire Hathaway<\/a>, BYD could give VinFast headaches. In Indonesia, Southeast Asia\u2019s largest economy, EVs from BYD are now competing directly against<\/a> ones from VinFast.<\/p>\n \u201cChinese car companies are the most competitive car companies in the world,\u201d Musk said in Tesla\u2019s latest earnings call, warning<\/a> about the Chinese competition. \u201cIf there are no trade barriers established, they will pretty much demolish most other car companies in the world.\u201d\u00a0<\/p>\n<\/div>\nVinFast isn\u2019t alone in a struggling EV market<\/h2>\n
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