Vietnamese electric vehicle maker VinFast's losses widened in the second quarter due to rising costs linked to its overseas expansion and impairment charges, although its revenue rose, Reuters reported.
VinFast, which started to deliver cars in California last year, said it made a net loss of US$773.5m in the April-June period, an increase of 27% from the first quarter and 40% bigger than the same period last year.
Revenue jumped 33% quarter on quarter to $357m but its deepening loss underscores the risks of VinFast's aggressive expansion strategy which could have repercussions for its parent company Vingroup, the news agency said.
"We are still a startup so we expect to have losses for a couple more quarters," Thuy Le, VinFast's chairwoman, told Reuters in an interview.
"However the industry is driven by volumes. As we increase the volumes and optimise the costs, we should be able to get to even and profitability," she added.
Selling expenses rose by 25.5% quarter on quarter due to increasing sales and marketing costs, coupled with asset impairments, according to the filing cited by Reuters.
Gross margin was negative 62.7% in the second quarter, primarily due to an impairment charge of $104m on the net residual value of its vehicle inventories, up from $5m in the previous quarter.
Nevertheless according to Thuy, excluding these factors, its gross margin still improved.
The company delivered 22,348 vehicles in the first half of 2024, well below the full year target, and half of those were to related parties including its taxi operating affiliate GSM owned mostly by VinFast's founder, Reuters said.
