VinFast Auto Ltd.

Good day and thank you for standing by. Welcome to VinFast's second quarter 2025 financial results and Q&A webcast. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To ask a question via the webcast, please use the Q&A box available on the webcast link anytime during the webcast. Please be advised that today's conference is being recorded. And I'd like to hand the conference over to your first speaker, Ms. Amanda Bay, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to VinFast's quarterly earnings call. Joining me today are Chairwoman of the Board, Madam Thuy Le, and our CFO, Ms. Lana Nguyen. Before I turn the call over to Madam Thuy, let me remind you that some of the statements on this call include forward-looking statements under federal securities law. These include, without limitation, statements regarding the future financial and operating outlook, guidance, macroeconomics, industry trends, company initiatives, and other future events. These statements are based on the predictions and expectations as of today. Actual events or results may differ due to a number of risks and uncertainties. We refer you to the cautionary language and the risk factors in our most recent filings with the US SEC. In addition, management will refer to non-GAAP financials during this call. A discussion of why we use non-GAAP and the information regarding the reconciliation of our non-GAAP versus GAAP financials is available in the press release that we issued this morning. With that, I would like to invite Madam Thuy to start with the management remarks.

Good morning, everyone, and thank you for joining us today. It has been a while since we last spoke. I would like to begin with three important takeaways from the second quarter. First, our whole market, Vietnam, remains a pillar of strength, helping to drive another robust quarter. We ended Q2 with delivery growth of 172% year-over-year and revenue growth of 92% year-over-year. We are on track to achieve our 2025 delivery target, which is to at least double what we delivered in 2024. Second, we remain focused on international expansion with a strategy anchored around products, markets, and manufacturing. Our manufacturing capacity has expanded with the inauguration of two new factories in Vietnam and India, making significant progress in doubling our design capacity. At the same time, we continue to invest in R&D for our next generation vehicle platform. Finally, our financial position has been strengthened with the spin-off of our completed R&D assets and we continue to be backed by our founder and parent company. Before diving into the specifics, I would like to take a step back and look at the global EV landscape. Macroeconomics headwinds and evolving regulations have introduced greater uncertainties in some markets, while in others, supportive policies are accelerating adoption and intensifying competition. VinFast is not immune to these changes, but our long-term vision remains firmly intact, that is, to be a global leader in electric mobility. We continue to see strong momentum in our business, supported by the expansion of our green mobility ecosystem internationally and regulatory tailwinds driving EV adoption in our home market. To capture these opportunities, we are making deliberate investment in R&D and customer incentives to drive adoption. These are strategic choices to reinforce our long-term position in core markets. With that, let me begin with our delivery recap before moving to key market updates. First, let's look at EVs. In Q2, we delivered 35,837 units representing a 172% increase year-over-year. Over the first half of 2025, we delivered 72,167 units representing a 223% increase year-over-year. VF3 and VF5 continue to be the company's two best-selling models in the second quarter of 2025, contributing 61% of total deliveries. The F6 model ranked first, contributing 12% of total deliveries. Deliveries from the green series, which include our electric A and C segments as UVs, accounted for 15% of total deliveries during the quarter. Our EB deliveries to related parties, which include GSN and others, accounted for 22% of Q2 deliveries. Most importantly, our B2C deliveries have now accounted for over 70% of total deliveries for four consecutive quarters through Q2 2025. About e-scooter and electric bikes, we delivered 69,580 units in Q2, marking a 55% rise quarter-over-quarter and 432% increase year-over-year. Accumulatively, in the first half of 2025, we delivered 114,484 units, marking a 447% increase year-over-year. The incredible growth in the two-wheeler business was bolstered by favorable government policies to further accelerate EV adoptions, which I will elaborate further later on, along with BINPASS's ongoing efforts to support this transition as an early mover in green mobility. As of June 30th, we had 394 showrooms globally and provided customers with access to over 1 million charging points across our market. Now, let's turn into market updates, starting with Vietnam. Vietnam's auto market grew rapidly in the first half of 2025, with deliveries rising 1.6 times year over year to 254,794 units driven by surging EV demand. VinFast outpaced the market with 3.4 times volume growth and 67,569 units, more than the combined delivery of the next two players. We have maintained our number one position in Vietnam since September 2024. Three of the five best-selling models in the country during the first half of 2025 were VinFast EVs, including our VF6, our B-segment electric SUV, which has maintained strong, consistent momentum with monthly deliveries exceeding 1,000 units throughout the first half of the year. Policy momentum. It's also accelerating EV adoption, as Vietnam's goal is to have 30% of cars in circulation to be electric by 2030, and 100% of cars and taxis to be electric by 2050. VinFast is at the heart of this ambitious goal. Since 2022, EV-friendly incentives, including lower special consumption tax for EVs, Registration fee exemption until 2027 and 0% import duty on green auto parts have been implemented. In second quarter 2025, Hanoi and Ho Chi Minh City have announced plans to phase out gasoline motorbikes in the urban areas, further accelerating the shift to electrification. Together with public-private investment in charging infrastructure, Vietnam is merging as one of the most ambitious EV adopters in Southeast Asia, with EV penetration already around 30% as of June 2025. We are also making strong progress in B2B electrification. Binfast and GSM have partnered with nearly all major taxi operators to convert their fleet to EVs, a strong endorsement of our vehicle technology and long-term vision. Bringing this all together, Binfast has set a flywheel in motion. Consumer education, attractive EV and e-scooter offerings, and our green mobility ecosystem are working in tandem with supportive regulations to accelerate electrification in Vietnam. This same model underpins our international expansion strategy. The opportunity in our key Asian markets is compelling, growing middle class, low vehicle ownership rate, and even lower EV penetration. With broadly similar socioeconomic conditions, this market are prime for EV adoption. Let's start with India. We opened for brief booking of our VF6 and VF7 in mid-July, followed by the inauguration of our CKD manufacturing facility in Tamil Nadu this August, marking a significant milestone in our entry into Indian market. BINFAST India has signed strategic agreements with 13 dealership groups to launch dealerships across 20 cities. This partner was carefully selected to deliver full-service 3S support, sales, service, and spare parts, in line with our customer-first philosophy. As an early pure player EV engine in India, we are taking a disciplined approach. Initial volumes are expected to be modest as we focus on delivering strong customer satisfaction and protecting dealer profitability in a competitive market. Moving on to Southeast Asia. We continue to deepen our presence in expanding our green mobility ecosystem and product lineup to offer more choices to consumers. In Indonesia, our affiliate VGreen is deploying charging ports together with four partners. And in the Philippines, VGreen and GSM have signed an MOU with Miramco, the Philippines' largest power distribution company, to co-develop charging stations and technical expertise. Indonesia contributed approximately 5% of our total EV deliveries in the quarter, reflecting an early momentum in one of Southeast Asia's most promising markets. The VF3 model recently awarded the best EV city car at the Indonesia International Motor Show, representing 35% of our deliveries in the country. The vehicle is demonstrating strong initial traction, and it's beginning to attract consumers from more established brands in the compact EV segment. To make EV even more accessible to Indonesian consumers, BINFAST is offering a suite of competitive incentives, including free charging, attractive financing rate, and a resale value guaranteed up to 90%. As of June 30th, we have 24 showrooms in Indonesia, alongside with an authorized service network operated by local partners. Underscoring our long-term commitment to Indonesian markets, BINFAST has joined the country's leading automotive industry association. On the manufacturing front, our CKD facility in Subang is on track for technical SOP by the end of 2025. During the quarter, GSM Indonesia has also been scaling rapidly with plans to expand its fleet and broaden its footprint into new cities. The business announced a strategic partnership with Goja, Indonesia's second-largest ride-hailing platform, a move that significantly enhanced our visibility and reach in the country. We expect this increased exposure and ecosystem build out to drive B2C adoption, laying the groundwork for long-term consumer growth. Moving on to the Philippines. Electrification has lastly been driven by the adoption of hybrids with battery electric vehicles, still representing a smaller but increasingly significant portion of the market. According to data from the Automotive Industry Association, CAMPI, for the first six months, Electrified vehicle sales stood at 13,490 units, of which battery electric vehicles account for 2,439 units in the first half of 2025. FinFast is capturing an estimated 25% market share in the battery electric vehicle segment, again thanks to the VF3 whose unique design and attractive pricing appeal to Filipino consumers. A key part to our sales strategy is to focus on the fleet sales opportunity to large corporates. While it is still early days for our expansion in the Philippines, we believe that Filipino consumers will increasingly recognize the strength of our value proposition as we introduce more models alongside with GFM fleet expansion. GSAM is disrupting the traditional taxi industry by becoming the first fully foreign-owned company to operate taxis in the Philippines, starting with a fleet of 500 EVs. We've seen strong initial consumer interest in trying GSM, and our sales team is actively looking to convert the enthusiasm into long-term B2C sales by turning ride-hailing passengers into VinFast owners. Move on to North America and Europe. We are continuing to right-size our operational footprint following the strategic transition from direct-to-consumer to a dealer-led distribution model. In August, our first third-party dealership opened in California, and we continue to focus on offering the best value in the market in Europe. we expect to make our eBus debut at Bus World Brussels in October, where we will showcase two eBus models. Our brand reputation is enhanced by customer testimonials and word-of-mouth recommendations, and we want to thank our dealer partners and customers for trusting us throughout this transition period. As of June 30th, We had 30 showrooms in North America and Europe, with over 80% of that being dealers' showrooms. Turning into manufacturing and R&D activities in Vietnam, which are central to our long-term competitiveness. In June, we inaugurated our second factory in Vietnam, located in Ha Tinh, Central Vietnam. completing construction and installation in under seven months, one of the fastest-built auto plants in the world. The facility had an initial design capacity of up to 200,000 vehicles per year and would focus on compact It is also expected to attract suppliers to the zone, supporting our goal of reaching over 80% localization by 2026. Our innovation, the LimoGreen MPV, which is our first model on one of the next-generation vehicle platforms with zonal EE architecture, was delivered to customers in early August. With a diversified and evolving product portfolio, strengthened manufacturing base, and next-generation platform, BINFAST is well-positioned to meet diverse customer needs and accelerate the adoption of electric mobility globally. Before I hand it over to our CFO Lan Anh, I want to briefly explain the strategic spin-off of completed R&D assets that we announced in August. VinFast transferred a portfolio of completed R&D assets into a new entity, Novatek, which our founder, Mr. Phat Nhat Vuong, agreed to acquire for $1.6 billion in cash. The transaction is expected to close in Q3 and highlights Mr. Pham's continued commitment to supporting VinFast's long-term growth. VinFast will maintain access to all technologies transferred through licensing agreements, ensuring continuity in our innovation and product development roadmap. Now, let me turn it over to Lan Anh for her remarks and discussions on financials.

Thank you, Madam Thuy, and hello everyone.

As Madam Thuy explained, we see tremendous opportunities in our core Asian markets underpinned by raising consumer awareness and supportive government policies for electrification. To capture this momentum, we are accelerating our investment in promotion campaigns and customer incentives. These initiatives are essential to building long-term brand equity and market share. At the same time, we remain committed to investing in R&D to advance our product roadmap. Now let me walk you through our results in more detail. The company's strategy in Q2 2025 continued to focus on driving top-line growth. As a result, total revenue reported $663 million, representing a 92% year-over-year increase and a 2% quarter-over-quarter gain, driven by an increasing EV sales volume in Vietnam. Within our product portfolio, the VR3 sustains its strong momentum, emerging as the best-selling car in Vietnam's auto market during the first half of 2025. Our second bestseller, the VR5, delivered a solid 35% year-over-year increase in the sales volume, while the VF6, our racing electric BSUV, posted an impressive 297% year-over-year growth. Cost of goods sold for the quarter was $935 million, an increase of 66% year-over-year and a 6% quarter-over-quarter. reflecting the continued roundup in deliveries. Gross margin was negative 41% in the second quarter of 2025, compared to negative 63% in the second quarter of 2024, and negative 35% in the first quarter of 2025. The improvement in gross margin over the second quarter of 2024 was attributed to increased sales and improved costs. The decrease in cost margin compared to the first quarter of 2025 was primarily driven by the higher warranty provision rates, an increase in cost of vehicles sold, excluding sales reduction relating to free-charging program, NRV, and other costs. Cost margin was minus 20.9% in Q2 2025 compared to minus 19.3% in Q1 2025. and minus 33.7% in Q2 2024. Moving on to operating expenses. R&D expenses were $93 million, decreased 12% year-over-year, and increased 16% quarter-over-quarter. The decrease in R&D costs compared to the second quarter of 2024 was primarily due to a reduction in engineering and development costs. As VinFast has completed the product development work on multiple models in the previous year, the increase in R&D costs compared to the first quarter of 2025 was attributable to R&D costs in relation to its new models, such as the Green Series and EasyVan. As noted previously, our existing models will undergo a technology refresh on the new vehicle platforms, which will drive additional R&D over the next four months. As a percentage of revenue, R&D in Q2 2025 was 14%, an improvement from 31% in Q2 2024. SE&A expenses for the quarter was $136 million, decreased 11% year-over-year and 9% quarter-over-quarter. The decrease over the second quarter of 2024 was driven by no additional impairment charge being required for the battery production lines. The decrease compared to the first quarter of 2025 was due to lower impairment charge for battery leasing activities. As a percentage of revenue, SG&A improved to 20% compared with the 23% in Q1 2025 and 44% in Q2 2024. Adjusted EBITDA, which includes net loss on financial instrument at far value through profit and loss for the second quarter of 2025, was minored $419 million. with an EBITDA margin of minus 63% compared to minus 56% in Q1 2025 and minus 123% in Q2 2024. The improvement from minus 123% in the same period last year reflects benefits from increased scale. Net loss for the quarter was minus $812 million, with a net loss margin of minus 122% compared to minus 109% in the first quarter of 2025. Now turning to the capex and cash flow, capex for the quarter was of $212 million, an increase of 46% quarter over quarter, and 102% year over year, driven by the incurred capex for the new plans. Operating cash flow for the quarter was minus $463 million compared to the minus $314 million in Q2 2024 and minus $602 million in Q1 2025. On a second-show basis, the improvement in cash flow from operations was due to improvements in networking capital. In Q1 2025, we recorded higher chances in inventories due to stocking up ahead of the Lunar New Year period in Asia. In terms of cash flow efficiency, our cash burn in Q2 2025 was equivalent to the 101% of revenue compared to 116% in the same period last year. Finally, an update on our liquidity and the previously announced grant and Borrowings Commitment in late 2024. As of 30 June 2025, VinFast's outstanding borrowings from Vingroup under this commitment was $1.2 billion. The company received a total of $1.1 billion disbursement from our founder pursuant to the grant agreement. Our total liquidity as of 30 June is $4.2 billion. which reflects cash and cash equivalents combined with the 1.6 million US dollar expected cash proceeds from the recently announced completed R&D access spin-off transaction, the remainder of the fundraising commitment from Vingroup and our founder and ELOC facility. Operator, let's open for Q&A.

Thank you. We will now begin the question and answer session. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit to one question and one follow-up at a time. To ask a question via the webcast, please type it into the box and click submit. We will now take our first question from the line of Andres Shepard from Cantor Fitzgerald. Please go ahead, Andres.

Hi, good morning, everyone, and good afternoon. Thank you so much for taking our questions. Madame Tuya, just curious if you can maybe give us a little more color on the cost discipline efforts that you're putting in place. You know, I noticed that margin came a little bit below the previous quarters. for this time, you know, how should we think about that cost discipline for the second half of the year and into next year? Particularly, how should we think about gross margins and blended ASPs for the second half and into next year? Thank you.

Hi, Andrew. Nice talking to you again. Well, I think Over the past few quarters, as you can see, we deliver meaningful warm cost savings, so about like 16% reduction in Q4 2024 and another 11% in Q1 2025. In Q2 2025, the mix was more concentrated on models like the BF3, BF5, and BFE34, with the most optimization that has already been realized. So, further savings this quarter were more limited until we move on to the new platform. So, looking ahead, we see a greater potential in upcoming versions of VF6 and VF7. This will be produced on our new vehicle platform, as we talked about it before, which will benefit more from the optimized design. in-house battery production, and deeper collaboration with suppliers. So yeah, while the higher volume certainly give us more leverage on pricing, our cost efficiency don't just come from just scale. They've been driven by technology innovation, long-term partnerships with suppliers, and just other factors to improve on the bond cost as well. So depending on the mix, it could be different quarter from quarter.

Got it. Okay, that's super helpful. Thank you so much. And just as maybe a quick follow-up, so you've reaffirmed your outlook to more than double sales this year versus last year, which is great to see. Just curious if you can maybe help us understand where is the second half growth going to be coming from primarily? Is it continue penetration in Vietnam or is it India, Indonesia, Philippines? How should we think about that growth for the second half? Thank you.

So we're very confident we're on track to hit our 200,000 unit delivery target. Historically, the first half of the year makes up less than 30% of annual volume. And as you recall last year, it was only I think like 22% of 2024 volume. This is largely because of seasonality in Vietnam, where the consumers tend to hold back a bit ticket purchases earlier in the year. But even with that seasonality, our growth has been strong this year versus last year. And looking forward, we expect a significant ramp up in the second half, supported by a few key drivers a continued very robust demand in Vietnam, a stronger dealer and after-sales network internationally, and also the rollout of charging infrastructure, new model launches like VF6, VF7, as well as a growing fleet sale to like GSM and other transport operators. On top of that, we will be expanding our green series with the model like Nemo Green, Minio Green, and other EC fans. And we are seeing quite a lot of demand for the green series as well.

Excellent. That's great. Thank you so much. Congrats on the quarter. We'll pass it on. Thank you.

Thank you. There are no further questions from the phone lines at this time. I'll hand back to the room for questions on the webcast.

Thank you, operator. We have a question from the webcast. Could you elaborate on the impact of next generation platforms on margin improvement and help quantify the contribution? Ms. Lanan will answer this question.

Yes. In August, we delivered the first LimoGreens, our new engine, into the MPV segment with novel vehicle platform and the EE 2.0 architecture. The feedback so far has been positive. And due to the recency of the product launch, we are in a position to disclose the margin impact. However, the next generation of eco-platforms are expected to drive meaningful cost savings, like Madam T just mentioned. Moreover, it also drives a significant improvement in customer experience. The OTA update time is cut from hours to less than one hour, with more reliable remote updates via high-speed internet protocol linking key components. We are also working on the new vehicles in the palace to hit the market in the coming months, such as like MinioGreens and EasyVans.

Thank you.

Online question, please give more color on the impact on gross margins in Q2, specifically on the higher warranty provision rates and the increase in the cost of vehicles sold for which revenue has been deferred. Ms. Lana, would you like to take this question?

Yes. To recap, our gross margin was negative 41% in Q2 2025. compared to the negative 35% in Q1. However, if we exclude sales reduction related to the free-driving program, the impact of NRV, the cost of vehicles sold for which revenue has been deferred, and other provisions, gut margin was minus 20.9% in the Q2 2025, compared to the minus 19.3% in the Q1 2025. The higher warranty provision during the period is typically, I mean, in the early years of the post-production generation, we expect this to go down and align with the industry benchmark as our product major. We recognize a cost of goods sold for a small number of vehicles already delivered under customer contracts. while the revenue recognition will occur in the subsequent periods once contractual acceptance milestones are met. This accounting treatment reflects a timing difference rather than an economic loss.

Thank you. Hi, operator. Can we check if there are any questions on the line?

We currently have no further questions from the phone line, but as a reminder, to ask a question, please press dial 11. Thank you.

Thank you, operator. Our next question is regarding our e-bus business. Can you share your plans for the e-bus business, and should we expect the overseas e-bus business to be a meaningful driver for VinFast? Ms. Hui, will you take this, please?

Sure. So last quarter, we shared that we plan to expand BinPass eBus presence into Asia and Europe. I'm happy to announce that we also just hired a new person to help eBus business in North America. We have since received a lot of inbound interest from international partners, which reflects the attractiveness of our products. That said, our overseas eBus strategy is still in early stage. And we haven't disclosed any specific targets yet. This year will be mostly on starting the business. But as an update, we will distribute two eBus models for European markets at the Bus World Brussels. So the press conference will be on October 4th, 2025. Please help us spread the word out if you can. I think we're starting with European market because it's particularly very promising for us as well. But looking ahead, we think that e-bus business will evolve as part of our broader green mobility strategy. And we'd be happy to report more in the coming quarters.

Thank you, Madam Thuy. Our next question is regarding e-scooters. What percentage did this segment contribute to first half 2025 revenue and gross loss? How many units do you target to deliver in FY 2025, and what is the current production capacity and expansion plans for the e-scooter business? Ms. Lanang, would you like to take this question?

For the first half, the contribution, small percentage compared to total. We will disclose in the full financial statement on the form 6K later. For the guidance, while we do not provide the guidance for e-schoolers this year, we expect a substantial increase in delivery for the rest of the year. This is a continuation in the strong sales momentum year-to-date. Also thanks to the favorable government policies for the accelerated EV adoption and VINFAR's ongoing efforts to support this transition in the very early move in the green mobility.

Thank you, Ms. Lanan. The next question on the line. What is the expected timeline to launch the VF6 and VF7 in North America? Adam Tui, would you like to take this?

Well, we are in the middle of preparing our five-year plan for North America. I think things are still moving. We do have at least the VF7 for the plan, but we would like to address this topic in probably at the end of the year.

Thank you, Madam Thuy. And there's a follow-on question about the e-scooter business. So this quarter, two-wheeler deliveries far exceeded EV growth. Does the company plan a structural shift in this business model, or do you still expect four-wheelers to dominate long-term revenue? Madam Thuy or Miss Lana, would you like to take this question?

Sure, I'll go first. It's not really a structural shift per se because the average selling price for the e-scooter is a lot lower than the EVs. However, we did see a significant pickup in Vietnam for e-scooter. This just reflects the market dynamics where in Vietnam or in Southeast Asia in general, the motorbikes are a lot cheaper the motorbikes sold each year a lot higher than vehicles. So in Vietnam in particular, it's about over 3 million motorbikes are sold annually versus about 400,000 cars. And what is interesting is that the consumer in Vietnam are showing strong readiness to switch from gasoline motorbikes to electric scooters. And also there's a certain shift in regulations as well that are driving this movement to greener transportation. So going forward, we still believe that the four wheelers will remain the longer term revenue drivers. However, e-scooter, electric buses, will be adding more to the revenues going forward.

Thank you, Madam Thuy. The next question is regarding the warranty margin track, which impacted Q2, and should we expect this to be a headwind in the back half of 2025? Lanan, would you like to take the question?

Yes, sure. The Q2 margin impact was mainly an early stage effect that's very common with the first product generations. With the ongoing design upgrades, more mature manufacturing processes, and stronger after-sales support, warranty costs are expected to trend down over time and normalize closer to the industry levels. So we don't see it like a sustained headwind in the back half of 2025.

Thank you, Lanan. The next question on the line is regarding deliveries in the foreign markets. Of total deliveries in the foreign markets, what proportion was to related parties? Ms. Lanan, would you take that question, please?

So for the related part to your transaction that we discussed for the global level, not just a specific for the foreign market. So across the market of the first half of 2025, the overall, our B2C deliver, actually, if we accounted for the four consecutive quarter, through Q2 2025, that accounted for the over 70% of the total delivery.

Yeah. Thank you, Ms. Lana. Our next question is regarding an update on our factories in India and Indonesia. Adam, please.

Oh, okay. In Vietnam, as you probably saw from the news, we opened the factory in Ha Tinh. at the end of June, and the factory has a capacity of up to 200,000 compact EVs, and we're building models like the E3, the EC-Benz on a very flexible line. In India, in early August, we opened the factory in Tamil Nadu with the initial capacity of 50,000 units per year and scalable to 150,000 units per year. We are producing the VF6 and VF7 for India as well for export from the factory. In Indonesia, the construction at Subang factory is progressing well, and we target to open by the end of the year as well.

Thank you, Madam Thuy. Our next question is regarding the green mobility ecosystem. How is that rollout progressing internationally?

I think in the previous quarter, we discussed our strategy, taking the strategy from Vietnam where we're rolling out not just bin fast vehicles, but the whole green ecosystem and bringing it to other markets. So I'm happy to report that we started doing that in the markets closer to us. In Indonesia, GSM has already scaled quickly since our launch late last year. We have about 3,000 calves on the road today. The utilization rate is running at about 95%, and with our recent partnership with Doge, that gives us a broader reach to the customers. On the charging side, VGreen in Indonesia is targeting about 63,000. charging portal in the country by end of 2025. In the Philippines, GSN is the first fully foreign-owned taxi operator. We offer fares as low as traditional taxis and about one-third of other platforms at big hours, while also giving drivers better income and benefits. So currently, we have about 500 taxis in Metro Manila. supported by two depots and about 100 charging stations, either live or under development. VGreen is working on the target to have about 15,000 charging points in the Philippines by the end of 2027. In India, it's still early for us, but VGreen already established the company there and is looking for partners, and GSM is also exploring to enter India very, very soon.

Thank you, Madam Thuy. We have a few more questions from the line. How has the feedback been from consumers around the company's buyback program on returned vehicles, and how do you expect that to change in the medium term?

Okay. I think the buyback program has helped build consumer confidence in EV adoption. But given the strong value proposition of our vehicles, we expect customers will have little reason to exercise it, and its relevance will naturally diminish over time.

Thank you, Madam Thuy. Our next question is regarding our positioning in India. Why has VinFast initially launched the VF6 and VF7 in India while choosing VF5 and VFE34 for the Indonesia market? Please give more colors on the key differences for these two markets.

I think we're announcing India in the next few days. I'm kind of holding back for the announcement and not to talk about it yet. But I think with Indonesia, from a social economic standpoint, it's quite similar to Vietnam. So our approach has been so far very similar to how we roll out in Vietnam. So, wait until a few more days and there will be an exciting announcement about India.

Thank you, Madam Thuy. Our next question is regarding product lines, certain product lines which have already reached normalized gross margins, and how should we think about the BOM cost trends going forward? Will scaling volumes be sufficient to offset pressures from the higher end products?

Yeah, on a normalized basis, excluding the NRV provisions, exceptional items and non-cash like depreciation and amortization, our VF3 and VF5 models are already cross-margin positive. For higher spec models like VF6 and VF7, we focus on improving margins through platform simplification, supplier resourcing, and localization. As a volume scale, we expect to see the second show improvements. From your perspective, we anticipate a normal high score margin turning positive at scale and localization fully take effect. We will continue to update you on that progress each quarter. Thank you.

Thank you, Ms. Lanan. Our next question is actually regarding e-scooters. VinFast has announced new measures to accelerate e-scooter adoption, such as offering free charging and working with financing partners. How should we think about the financial impact of these initiatives?

For our e-scooter business, the e-scooter business is still loss-making, and we expect that to continue in the near term as we run out of adoption support measures. For example, in July, we signed a cooperation agreement with the 12 major banks in Hanoi. Under this program, buyers receive a 10% discount on VinFast e-scooter. Pay just 10% upfront and enjoy free charging at the VGreen public station until May of 2027. For the profitability for e-scooters remain a long-term goal. Right now, the focus is on the making electric two-wheelers more accessible and aligning with Vietnam's green mobility agenda. While we don't provide specific delivery guidance for e-scooters, it is reasonable to expect volume to remain materially higher than our formula business in the coming years.

Thank you, Ms. Lanan. Our next question is regarding the decision to reintroduce battery leasing in Indonesia. How does bringing back battery leasing impact the company's pricing in Indonesia? I don't see which would like to take this.

Well, I think if you've been following VinPass, you remember that at the beginning, we offer battery leasing in Vietnam for the first few years, and we just placed it out recently. Battery leasing allows the consumer to adopt EV faster, because the upfront upfront payment is lower than the gasoline car, as well as the monthly payment is less than the gasoline consumption for the vehicle. And total cost of ownership will be lower. So when we first introduced, about 95% of our customers chose this option. Gradually, when customers get more familiar with EVs in the market, like Vietnam, for example, and more comfortable with EVs, then we phase it out. So we're doing the same thing in Indonesia right now, and we believe that it's going to have a similar impact like it did in Vietnam. By offering material leasing, we are building a broader customer base, accelerating EV adoption, and also strengthening our foothold in Indonesia, which is one of the Asia's fastest growing EV markets.

Thank you, Madam Thuy. On that note, the follow-up question in the line is regarding the competitive intensity in our core Asian markets, and how long do we anticipate running promotional campaigns, and are these promotional campaigns in response to competition in the region?

Competition is good for consumers. So that's what we're facing in every market. Competition is indeed very strong across Asia, and that is to be expected with how quickly EV adoption is accelerating. Our promotions are just like reaction. They are deliberate strategy to build awareness and accelerate adoption, especially in early stages of entering a market. For example, we just introduced the battery leasing in Indonesia, as I mentioned before. We partnered with the banks to offer zero percent interest financing and run selective cash discount on zero dollar payment programs, for example. But that said, our differentiation goes beyond just pricing. We are investing heavily in building the full ecosystem. Expanding the VGreen charging infrastructure with local partners and growing GSM ride-hailing fleet. Over time, as we gain scale and as our ecosystem matures, we expect promotion to normalize and the ownership experience with strong warranty, excellent after sales, and good value will become the real driver for consumer confidence.

Thank you, Madam Thuy. And the follow-up question to that is regarding how international sales is tracking.

In the first half of 2025, international markets made up less than 10% of our total deliveries, which is similar to last year. The mix has shifted, though. Today, Indonesia and the Philippines are the main contributors, whereas last year it was US and Canada. We are seeing encouraging progress. In the Philippines, VinFast captured a 25 percent share of the battery, the BEV segment in the first half. And in Indonesia, about 5 percent of our quarterly delivery came from there, from Indonesia, mostly led by VF3, which was recognized as the best EV city car. Sales in India are set to begin in Q3. So looking ahead, we are building scale across Asia with three key priorities. First, we're rolling out the full green mobility ecosystem with GSN ride-hailing and with VGreen charging network. Secondly, we're making EVs more accessible through expanded product offerings and strong financing partnerships. And finally, we're working closely with the government and partners in the Philippines, India, everywhere to push the green transition in those countries.

Thank you, Madam Thuy. And our last question on the line is regarding what drove the higher cash balance this quarter and what is the outlook for cash burn through 2026 and 2027? Ms. Lanan, please.

Yes, thank you. The higher cash balance mainly reflects the financing inflows of the about 1.2 billion U.S. dollars, which more than operating outflows of around 463 million U.S. dollars and investing outflows of around 305 million U.S. dollars. This created a net uplift of roughly 500 million U.S. dollars, The key drive is the new term loan agreement with the Dutch bank AG and Seatown Holdings at the end of the first half of 2025. For looking ahead, we expect operating outflows of $400 to $600 million per quarter in the near term. This is tied to having operations investment in our overseas plans, R&D for the next generation models and broader global operating costs. Over time, we expect that this to improve as operating leverage builds and margins strengthen. On liquidity, as I mentioned earlier, that as of the 30th of June, our liquidity stood at the $4.2 billion, which includes cash and cash equivalents Combined with the 1.6 billion US dollar that we expect that the CAAT is going to be like the CAAT proceeds from the recently announced completed R&D access spin-off transaction, I mean the Novatec, and the remainder of the fundraising commitment from Vingroup, our founder, and a lot of facilities. Also, we are well supported by project financing from our Indonesia and India plans, assisting bank loans. So together, this provides with an ample runway to execute the world's strategy through 2026 and 2027. Thank you.

Thank you, Ms. Lanan. Operator, that concludes our Q2 earnings call. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.