Vietnamese EV-maker VinFast is a truly interesting case study. Vietnam has quickly become a manufacturing powerhouse, but its traditional strength has not been building and exporting cars, especially not electric vehicles. So it was quite surprising when VinFast, which is majority owned and controlled by Vietnamese conglomerate Vingroup, not only started producing EVs under its own brand but announced in 2022 it would be building a factory in the United States to break into the North American market.

But it didn’t stop there. VinFast began expanding faster than anyone likely thought possible or prudent, building factories in India and Indonesia with an annual production capacity of 50,000 vehicles each. Combined with its two production facilities in Vietnam, VinFast is capable of producing up to 600,000 electric vehicles per year, as long as sufficient demand exists to absorb the output.

Unfortunately, such demand does not exist. At least not yet, and maybe not ever.

According to company filings, VinFast delivered 197,000 EVs in 2025. Eighty-nine percent of these were sold in Vietnam and only 11 percent to international buyers. More than a quarter of VinFast’s sales in 2025 were also made to related parties, meaning companies controlled or affiliated with Vingroup or its billionaire founder Pham Nhat Vuong. This pattern is common in the company’s sales record.

VinFast reports that it has a 36 percent share of the Vietnamese auto market. But despite aggressive expansion, it has yet to prove that it can flourish in more competitive international markets against established brands like Tesla and BYD. Meanwhile, the gutsy but high-risk North American gambit has collapsed. Construction is stalled, and now the North Carolina government is suing VinFast to recoup public funds and get the land back so it can be used for other ventures.

We might call VinFast’s aggressive expansion strategy visionary. But it is an increasingly costly vision, and there is a good reason why few others have tried it. From 2024 to 2025, revenue doubled from $1.8 billion to $3.6 billion, but VinFast continued to lose money regardless. The firm reported negative earnings of $3.9 billion, meaning the carmaker lost more money last year than it collected in revenue. The company’s cumulative losses now stand at $14.5 billion, with negative equity of $3.6 billion.

Short and long-term debt increased in 2025, while trade payables were reported as $1.3 billion, up from $458 million two years ago. VinFast also reported $1.36 billion in inventory on its balance sheet, which likely means unsold cars and parts. Liabilities are increasing, inventory is not moving as fast as it needs to, and the losses are piling up. Meanwhile, cash on hand was only $293 million.

The only reason VinFast isn’t in worse shape is that Vingroup and Pham Nhat Vuong have deep pockets. They have made a series of loans, cash grants and other financial arrangements that have allowed VinFast to continue operating despite mounting debts, negative earnings and surplus inventory. Debt to related parties stood at $2.65 billion in 2025, which is actually an improvement compared to 2024, when it was $4.4 billion.

You don’t need to be an expert to see that this is a high-risk gamble. And it seems VinFast is now making some moves to try and place itself on a sounder financial footing. Last month, it was reported by Reuters that VinFast plans to sell its two Vietnamese factories and “shift $7 billion worth of debt off its books.” The sale will involve some related parties or people that are in some way connected to Vingroup, although the details of the transaction are not entirely clear.

Shifting debt around might save VinFast from immediate insolvency. But it won’t solve the fundamental problem, which is that VinFast has built enough capacity to produce 600,000 EVs a year, and the domestic market is becoming saturated. No matter which entity’s balance sheet the debt ends up on, VinFast needs to find foreign markets to absorb more of its productive capacity.

So far, the car-maker has struggled to break into markets outside of Vietnam and find buyers that aren’t affiliated companies. Facing tough competition from Chinese electric car-makers, the path for VinFast to achieve its wildly ambitious EV dreams is becoming increasingly narrow.