VinFast, Vietnam’s BYD, has lost $2.4 billion in 2023

Tesla’s Vietnamese competitor is building a $2 billion manufacturing plant in North Carolina, is ready to start construction on another in India’s Tamil Nadu, and has another. organized in Indonesia.

This week, VinFast reported a net loss in the fourth quarter of $650.1 million, up 3.4% from the previous quarter. For the full year, VinFast’s net loss reached $2.4 billion, up 14.7% from 2022.

On the other hand, revenues grew significantly, jumping 91% to $1.2 billion last year from 2022, and the company plans to produce 100,000 vehicles this year, up from around 35,000 last year.

VinFast is part of Vingroup, a conglomerate headed by Pham Nhat Vuong, Vietnam’s richest man. The carmaker was launched in 2017, previously making traditional gas-powered cars relying solely on EVs five years later.

It started selling its VinFast VF8 in the US last March, but critics beaten car, citing improper handling and poor performance.

Despite this, the company’s shares rose 504% in six days after its IPO in August 2023 on the Nasdaq. VinFast’s market share briefly exceeded—before rapidly collapsing—that of Ford, Volkswagen, and General Motors combined.

From a peak of about $190 billion, the company’s market cap now stands at just $11.7 billion.

One issue with VinFast shares is that Vuong owns almost all of them, and only about 2% is available for purchase by investors. This means even small volume changes can lead to large price movements. VinFast said last month plans to add shares available up to 10% to 20% by the end of the year.

VinFast is not alone in the struggling EV market

Of course, VinFast isn’t the only EV maker struggling to make a profit. Sales growth of EVs, while still strong, is slowing in the US and other markets.

This week, Rivian announced a fourth quarter with a disappointing outlook, saying it would cut its paid workforce by about 10%. Tesla CEO Elon Musk said his rival had to “dramatically cut costs” to survive, adding: “The design of their products is not bad, but the hardest part of making a car company work is achieving volume production and good flow of money.”

Even Tesla has warned of “particularly low” sales growth this year after a disappointing fourth quarter, and was recently surpassed in global EV sales by China’s BYD. Backed by Warren Buffett’s Berkshire Hathaway, BYD could give VinFast a headache. In Indonesia, Southeast Asia’s largest economy, EVs from BYD are available now compete directly from VinFast.

“Chinese car companies are the most competitive car companies in the world,” Musk said in Tesla’s latest earnings call, warning of competition from China. “If no trade barriers are put in place, they will destroy many other car companies in the world.”

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