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188. Bull, Bear & Beyond – VinFast: executive interview
11 Plays12 days ago
In this interview with VinFast, we are joined by Anne Pham, deputy CEO of investments, and Lan Anh, CFO. VinFast is a pure-play electric vehicle manufacturer with a line-up of electric cars, e-scooters and e-buses. The company has established itself as Vietnam’s dominant automotive brand with approximately 39% domestic market share and it is continuing to expand internationally into India, Indonesia and the Philippines.
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Transcript
Introduction of Key Guests
00:00:07
Speaker
Today I'm joined by Anne Pham, Deputy CEO of Vinfast, as well as Lang Aung, the CFO at Wagman.
Overview of Vinfast
00:00:16
Speaker
So for investors who don't know much about Vinfast, could you give us a brief overview of who the company is, where it's located and what you do?
00:00:23
Speaker
Sure.
Vinfast's Growth and International Expansion
00:00:24
Speaker
ah Well, VinFast was founded in 2017 within the Vingroup ecosystem, and we are pure play electric mobility company. Starting with two car models, we've now increased our models to five-folds, 13 cars by
00:00:42
Speaker
And at the same time, we've also expanded our market share tremendously. So we started with about 2%, but by 2025, we've ended up with over 30% market share in Vietnam, and we're the number one ah car brand by 2024.
Expansion into Asia-Pacific Markets
00:00:57
Speaker
extended that lead Beyond Vietnam, which is our home market, we've also expanded into India, Indonesia, yeah Philippines, which are sort of fast growing South Asian markets. And beyond that, we also have ah cars sold in the United States, as well as certain countries in Europe.
00:01:17
Speaker
Our model is essentially dealer led model where we work very closely with the domestic dealer ecosystem to sell our cars. So I'd love to move on to your international expansion strategy.
00:01:30
Speaker
So i think key to your growth is your move into Indonesia, India, and the Philippines. I'd love to hear a bit more about the sort of decisive decisions behind why these markets, is it policy driven?
00:01:41
Speaker
Is it the EV penetration rates? And I'd love to hear some kind of general what growth expectations of the next 12
Building a Supportive Ecosystem
00:01:48
Speaker
to 18 months. um I think since we got into electric vehicles in 2020, 2021, we've looked ah very closely at a lot of international markets and ah we are sort of growing very rapidly in Indonesia, India and Philippines, ah precisely because of their large population. ah relatively attractive, um like that means low at the moment, EV penetration around 3%, 6% in Philippines and about ah around 10% in India. And that gives us a lot of headroom to grow because ah these countries are also having very positive, supportive ah governmental policies. and we're going to be able to leverage what we've learned in Vietnam, which is a fast-growing country and fast ah you know adoption of um car consumption into ah these new markets that we're entering. So when we enter, we work um or we try to bring in a whole ecosystem that comprises of our own sister company, Ride Healing Company, called GSM.
Strategy for Profitability
00:02:56
Speaker
We also you know try to deploy with charging, work with local dealers, with local financial institutions to provide financing packages for our customers.
00:03:06
Speaker
So the idea is again very competitive and very easy to access from the beginning both for sale as well as after sale. So Alain, I thought we'd move on to your path to profitability.
00:03:20
Speaker
I'd love to hear a bit about your thoughts on what some of the key drivers will be in reaching that gross margin and EBITDA positive inflection point and whether It's gonna be driven by volumes, ah cost reductions for your platform new platform or localization.
00:03:37
Speaker
Yeah. The way we think about the margin improvement is quite straightforward. um In the near term, scale is the main driver. And as we see that um we we we have the matter fixed cost absorption.
00:03:53
Speaker
So we can see for the improvement in terms of the cost margin trajectory, um At the same time, we have the structural cost levels, including the bomb cost reduction via the higher commonality, ah lower the complexity, and um at the same time, we we have time to develop for the our EE 2.0 architecture.
EE 2.0 Platform and Cost Reduction
00:04:25
Speaker
And um know for the in in Indian near term that we leverage for the scale, but later we still do many like ah directions for the improvement, the bomb cost to make sure about the gross margin improvement.
00:04:42
Speaker
So recently touched on your platform 2.0, is it expected to bring in about 30% reduction in efficiencies? I'd love to hear a bit more about the rollout of this, the sort of timeline around it and how you expect this to impact your margins moving forward.
00:04:57
Speaker
Yeah, so ah for the 2.0 EEE and launching of the new platform is not kind of the the big bang launch. But we do like ah consistently and to ensure about the production stability, esrowreti it helps us to manage for the execution risk.
00:05:22
Speaker
So we expect that in late of the 2026, I mean around Q3 of the 2026, we can launch um for the new platform models in the segment of VF6 and VF7. So the EE 2.0 architecture, we also launched along that side at that time.
00:05:44
Speaker
And for the, um I mean, the we also expect that it can help us to improve our cost margin.
Scaling with Entry-Level Models
00:05:54
Speaker
And it's kind of the support a lot for the cost reduction.
00:06:00
Speaker
but So moving slightly different to your product mix throughout 2025, your sort of entry level VF3, VF5, where you're most selling vehicles. How do you see this product mix developing in the next three to five years as that move to profitability happens? Do you expect an uptick in your higher margin vehicles or is it purely you happy with where it is now and it's scale on the lower on the entry level ones?
00:06:27
Speaker
Yeah, so in in the near term we still build for the scale, build the scale first, let the structural bomb reductions to help us achieve for the growth margin.
00:06:39
Speaker
And do you know, ah but we we need to build the scale first, so that's why we expect that for VF3, VF5, Herial Green and VF6 also to build a very critical volume. And we based on that we can improve for the, I mean the the cross margin leverage the economy of skills.
Growth in Two-Wheel Vehicle Sales
00:07:01
Speaker
um And for the the new models, the new platform in the segment of VF6 and VF7, we expect that it's going to be very support for the international mix, particularly in in the India and and Europe markets.
00:07:20
Speaker
I thought we'd move on to your e-scooters and e-bikes, your two wheelers. You recently announced that you sold over 400,000 in 2025, which is fairly significant growth in the segment.
00:07:30
Speaker
How do you see this sector and all segment of Infars expanding in the next couple of years? And do you see it being able to have meaningful margin contribution? Right.
00:07:42
Speaker
um I think, first of all, I think the contribution to both ah revenue top line as well as profitability of two wheels vis-a-vis four wheels is relatively conservative because the value of a two-wheel vehicle is a lot less than the value of of a car.
00:07:57
Speaker
However, um two wheels is very important to us, firstly, as a strategy, because it's the first point of adoption for anybody, be it a single person or a small family, to start you know their mobility journey. And they will always upgrade into the next ah vehicle for the family and a more and more premium car as their life progresses.
00:08:18
Speaker
ah In addition, i think greenifying the fleet for um any city, be it Hanoi, Ho Chi Minh, or the international cities that we're expanding to is very important as well because it helps to reduce pollution ah in public transportation. In Vietnam, we started out with a very conservative um you know two-wheel sale. In 2003, I think we sold about over 70,000 cars. Last year, um in 2005, we sold ah around 200,000 cars, which is similar to our sales in four wheels. And you're right, the next year target is to double that.
00:08:57
Speaker
But with a lot of, again, policy policy support and change in behaviors, customers are now very, ah you know, um it is very convenient for them to swap the batteries, for them to charge their vehicles at home or in their apartment building,
eBus Strategy and Public Transport Collaboration
00:09:14
Speaker
etc. So we think that the adoption will actually accelerate and the 400,000 target is very much within reach.
00:09:21
Speaker
So we've spoken about your two-wheelers and your four-wheelers. I'd love to hear a bit more about your e-bus strategy and the sort of markets that bit may potentially open up for you and how that business segment works.
00:09:32
Speaker
Certainly. Our eBus is a strategy extension from the entire mobility platform. And essentially it is a B2B to B2G business whereby we you know work with ah local regulators, governments, as well as ah public transport operators in order to bring electric buses into public transport networks.
00:09:57
Speaker
ah We have four electric bus models at the moment, ranging from small cars to bigger cars. And these buses, at least in Vietnam, they've run on public routes, both operated by our own sister company, VinBus, as well as by other operators. We've expanded this this business into Europe as well, where our cars have been showcased and are being um you know ah in discussion with governments in Brussels and a few other cities in Europe.
Integration of AI and Autonomous Technology
00:10:27
Speaker
In terms of scaling readiness, not only are we producing electric buses in Vietnam at the moment, we are also going to produce electric buses at least in India, where we have a factory, and a few other factories that we are thinking of rolling out electric bus manufacturing.
00:10:44
Speaker
So I thought we'd finish off by themes of autonomy, AI and robotics are ever more present in today's market. So I'd love to hear a bit more about what you think about the role these will play in the EV market, as well as what you're doing in in these areas.
00:11:00
Speaker
That's a very good question. I think across the industry, we are clearly seeing a shift of mobility companies such as Vinfast moving towards AI or integrating AI autonomy and software into the overall customer experience.
00:11:15
Speaker
um Our cars have already been designed from day one as a software-led or software-defined vehicle. And so this adoption for us is very natural. um In particular, ah the cars that we've commercialized at the moment offer a ah level two ADAS and we are working on level two plus plus that will be rolled out very quickly across all of our car models. Lan Ang has also mentioned an EE platform that allows us to unify across our various car models and that will also allow us to um deliver the intelligence, the data analysis and the various functionality faster as we gather more intelligence via you know our AI and our auto autonomous research.
00:12:05
Speaker
Thank you, Wan, for a really interesting conversation. more information on VINFAST, please see the Edison website.