Vingroup JSC automaker arm VinFast Auto Ltd has reported higher net loss in the third quarter despite rising revenues.

VinFast said in a statement on Thursday that its net loss for the quarter stood at $622.9 million, representing an increase of 33.7 percent from the third quarter of 2022 and an increase of 19.7 percent from the second quarter of 2023.

The group’s total revenues were $342.7 million, representing an increase of 159.3 percent from the third quarter of 2022 and an increase of 3.8 percent from the second quarter of 2023. Total revenues are primarily comprised of revenue from EV sales.

The group’s vehicle sales were $319.5 million, representing an increase of 185.2 percent from the third quarter of 2022 and an increase of 2.8 percent from the second quarter of 2023.

The increase in vehicle sales was mainly due to a significant increase in electric vehicle (EV) and e-scooter sales volume in Vietnam in the third quarter of 2023, including the VF e34, VF 8, VF 5, VF 9, and the Feliz and Evo.

This increase was partially offset by phasing out production of ICE vehicles in furtherance of our plan to fully transform into a pure EV player, which resulted in minimal revenue from sales of ICE vehicles in the third quarter..

The group’s electric vehicle (EV) deliveries were 10,027 in the third quarter, representing an increase of approximately 5.2 percent from the second quarter of 2023.

The firm started to see a sales increase in September in North America, particularly in Canada.

Meanwhile, e-scooters deliveries were 28,220 in the third quarter, representing an increase of approximately 177.2 percent from the second quarter of 2023 and an increase of approximately 112.9 percent from the third quarter of 2022.

VinFast has affirmed its FY2023 delivery target of between 40,000 and 50,000 vehicles.

As for FY2024 and FY2025, the firm expects a saving of $400 million in capital expenditures planned for global manufacturing between 2024 and 2025, which is expected to be used for completely knocked down (CKD) factories in Indonesia and India.

Overall, VinFast expects a net decrease in total capital expenditures for global manufacturing between 2024 and 2025.

VinFast also said the firm is on track to commence delivery of the VF 6 in Vietnam in the fourth quarter, and deliveries of the VF 7 and VF 3 in 2024.

The company believes that it has sufficient runway to grow in the coming years and will continue to look for opportunities to strengthen its balance sheet.

This outlook reflects the company’s current and preliminary view on the business and existing market conditions, which is subject to change.

It is noted that VinFast currently has over 107,000 charging points enabled on its platform in North America, an increase of 10,000 compared to the previous quarter.

This number is expected to grow as the company partners with new charging operators, and as VinFast’s current partners invest in their own network growth.

VinFast customers currently have access to 90 percent of DC fast chargers available in the public network (excluding Tesla’s).

VinFast plans to add new charging operators in California and Washington to its network and is in discussions on potential NACS adoption.

VinFast also expects to receive up to $1.2 billion or more in grants from Vingroup, the Chairman Pham Nhat Vuong and two key shareholders in the next six months.

The company will receive all of the proceeds from the sale from time to time of up to approximately 46 million ordinary shares by two of VinFast’s key shareholders that are controlled by the Chairman.

If the sum of such proceeds and the aforementioned $291 million contribution by the Chairman is more than $1 billion, VinFast will receive the surplus amount from the two key shareholders as a further grant on behalf of the Chairman.

As of September 30, 2023, Vingroup had disbursed approximately $955 million in loans to VinFast in accordance with the Capital Funding Agreement.

VinFast expects to receive up to 500 million in grants from Vingroup in the next six months.

The Chairman has also in September disbursed a total amount of $291 million to VinFast as a free grant in accordance with the Capital Funding Agreement.

In the third quarter, the company also received approximately $240 million from its deSPAC transaction and a private strategic investment by Gotion Inc.

“This is the first quarter that VinFast was listed on the Nasdaq and complies with reporting and disclosure standards required for foreign companies listed in the United States,” said Thuy Le, Global Chief Executive Officer of VinFast.

“We have inspirational and ambitious plans to build a greener future for everyone. The successes achieved in the past two quarters are just the first stepping stone,

“We have come up with a concrete action plan to deliver on each growth milestone and to accelerate our global expansion,” she said.

Meanwhile, the firm’s Chief Financial Officer David Mansfield said that the firm sees strong momentum in its business, supported by growing delivery volumes, increased revenues, and an improved path to profitability.

“We are focused on our cost cutting initiatives, optimizing return on capital invested, and switching towards a capital-light distribution model,” he said.

He also said VinFast is on track to meet its deliveries guidance and is well-positioned to expand in strategic markets such as Indonesia and India.

“We received significant funding in the third quarter from Vingroup and Chairman Pham Nhat Vuong and will continue to look for opportunities to strengthen our strong balance sheet to support growth and achieve further success,” he added.

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