VinFast Reports $2.4 Billion Loss for 2023
VinFast, Vietnam's electric-vehicle maker, faces tough competition and reports a significant loss for 2023.
VinFast's Financial Performance
VinFast, the electric-vehicle maker from Vietnam, is experiencing rapid revenue growth, but its costs are growing even faster. The company reported a net loss of $650.1 million in the fourth quarter of 2023, up 3.4% from the previous quarter. For the entire year, VinFast's net loss reached $2.4 billion, a 14.7% increase from 2022.
Despite the loss, VinFast's revenue saw significant growth, jumping 91% to $1.2 billion in 2023 compared to the previous year. The company also plans to increase its car deliveries from nearly 35,000 in 2023 to 100,000 this year.
VinFast's Market Cap and Challenges
VinFast, which is part of Vingroup led by Pham Nhat Vuong, Vietnam's richest man, launched in 2017 and focused primarily on traditional gas-powered vehicles before transitioning to EVs. Although the company's shares initially surged after its IPO in August 2023, its market cap has plummeted from a peak of $190 billion to $11.7 billion.
One of the challenges faced by VinFast is the limited availability of its shares for investors. Currently, Vuong owns nearly all of the shares, with only about 2% available for purchase. This lack of liquidity results in significant price movements even with small shifts in volume. VinFast plans to increase the shares available to 10% to 20% by the end of the year.
Struggles in the EV Market
VinFast is not the only electric-vehicle maker facing difficulties in turning a profit. EV sales growth, although still strong, is slowing down in the U.S. and other markets. Rivian, another EV startup, recently announced a disappointing fourth quarter and plans to cut its salaried workforce by approximately 10%. Even Tesla, the leading EV company, has warned of lower sales growth after a disappointing fourth quarter.
China's BYD, backed by Warren Buffett's Berkshire Hathaway, has also surpassed Tesla in global EV sales. China's car companies, according to Elon Musk, are highly competitive and could potentially dominate the global market. VinFast is now facing competition from BYD in Indonesia, where both companies offer EVs.
