Emerging EV Markets In Southeast Asia Will Drive Expansion

Key Takeaways

• Aggressive expansion in Southeast Asia and strategic partnerships aim to boost electric vehicle adoption, revenue growth, and market penetration.
  
• Transitioning to cost-efficient operations, dealer-based distribution, and greater vertical integration is set to improve margins and earnings quality.
  
• Heavy cash burn, uncertain profitability, weak brand presence, internal sales dependencies, and fierce competition create significant risks to sustainable growth and financial stability.

Catalysts

Engages in the design and manufacture of electric vehicles (EV), e-scooters, and e-buses in Vietnam, Canada, and the United States.

• Ongoing expansion and accelerated adoption of electric vehicles in key emerging markets, particularly Vietnam, Indonesia, and the Philippines-supported by rising urbanization and a growing middle class-are set to drive sustained volume growth and revenue expansion as VinFast continues broadening its product portfolio and increases market penetration.
  
• The rollout of dedicated VinFast charging infrastructure and ecosystem partnerships (GSM and V-GREEN) in Southeast Asia and beyond directly addresses the primary consumer barrier to EV adoption, supporting higher demand, increased deliveries, and ultimately greater revenue scale.
  
• Transition to a more cost-efficient, next-generation vehicle platform and zonal E/E architecture is expected to materially lower bill of materials and production costs, improving gross and operating margins as scale and operational leverage increase.
  
• Shifting from a direct-to-consumer to a dealer-based distribution model in international markets improves sales efficiency, reduces fixed SG&A expenses, and supports better profitability and net margin expansion over time.
  
• Continued vertical integration, supplier optimization, and shared components across models are projected to enhance purchasing power, drive down input costs, and strengthen overall earnings quality as economies of scale are realized.

VinFast Auto Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming VinFast Auto's revenue will grow by 54.4% annually over the next 3 years.
• Analysts are not forecasting that VinFast Auto will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate VinFast Auto's profit margin will increase from -149.1% to the average US Auto industry of 5.3% in 3 years.
• If VinFast Auto's profit margin were to converge on the industry average, you could expect earnings to reach ₫10567.4 billion (and earnings per share of ₫4517.91) by about July 2028, up from ₫-80215.9 billion today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 57.8x on those 2028 earnings, up from -2.7x today. This future PE is greater than the current PE for the US Auto industry at 15.7x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 19.64%, as per the Simply Wall St company report.

VinFast Auto Future Earnings Per Share Growth

Risks

• Reliance on ongoing financial support from Vingroup and the founder-combined with persistent negative operating cash flow and high cash burn ($607 million in Q1 2025, projected $2–2.5 billion annual burn)-elevates liquidity risk and dilution risk for shareholders, potentially impacting future earnings per share.
  
• Sustained negative gross margins (−35% in Q1 2025, even after improvement) and a business model that still requires very high delivery volumes (~200,000 vehicles in Vietnam to reach breakeven) make long-term net profitability uncertain, especially as aggressive volume growth may continue pressuring margins.
  
• Limited brand recognition and pivoting away from direct-to-consumer sales in North America and Europe raise questions about VinFast's ability to achieve sustainable international sales growth, potentially limiting long-term revenue diversification and margin expansion.
  
• Heavy dependence on intragroup sales (e.g., 21% of deliveries to GSM, the founder-owned taxi platform) may mask true B2C demand and creates a risk of artificially inflated volumes, undermining real revenue quality and masking underlying demand volatility.
  
• Intensifying global EV competition, especially from established brands and lower-cost Chinese entrants, combined with rapid technological advancements in EVs and batteries, increases the risk of eroding market share, product obsolescence, and downward pricing pressure, threatening long-term revenue growth and net margin improvement.

Valuation

• The analysts have a consensus price target of $5.833 for VinFast Auto based on their expectations of its future earnings growth, profit margins and other risk factors.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be ₫197921.2 billion, earnings will come to ₫10567.4 billion, and it would be trading on a PE ratio of 57.8x, assuming you use a discount rate of 19.6%.
• Given the current share price of $3.58, the analyst price target of $5.83 is 38.6% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.