Tesla's Vietnamese Rival VinFast Expands In Europe To Boost Aftersales Service; Analysts Lower Forecast Flagging EV Demand Slump

VinFast Auto Ltd. VFS shares are trading lower on Friday.

The company announced the signing of a cooperation agreement with Mobivia, one of Europe’s notable automotive repair and maintenance brands.

The deal expands the company’s access to a comprehensive aftersales service network for VinFast customers in France and Germany. 

“VinFast strongly believes that Mobivia’s extensive after-sales service network and skilled technical team will bolster customer confidence in the VinFast brand, ensuring an unparalleled experience for our European customers,” said Jean-Christophe Mercier, Vice-President Aftersales and Customer Ownership Experience Vinfast Europe.

Cantor Fitzgerald analysts Andres Sheppard and Anand Balaji reiterated the Overweight rating on the stock, lowering the price forecast to $8 from $9.

VinFast recently reported first-quarter earnings, with EV deliveries up 444% year over year, totaling 9,689. VinFast reaffirmed its FY24 target of 100,000 EV deliveries amid global expansion efforts and new product launches.

The analysts continue to model 80,100 vehicle deliveries in FY24 (including E-Buses), remaining conservative, given the slowdown in EV demand in the industry. 

VinFast’s dealership network continues to grow – focusing on North America, India, Indonesia, Thailand, and the Middle East as the Key Markets, the analysts add.

The analysts write that the company will continue to aggressively pursue additional dealers to sign over the coming quarters.

Despite the tailwinds, the analysts lowered the price forecast due to lower revenues, lower margins, and changes in the exchange rate. 

The analysts lowered the FY24 revenue estimate to $2.4 billion from $2.6 billion. 

The analysts also lowered FY24 gross margins to ~(24%) from ~(13%), cautioning about a slower ramp-up in vehicle deliveries and production. 

Price Action: VFS shares are trading lower by 5.17% to $2.57 on the last check Friday.