VinFast Auto Ltd. (NASDAQ: VFS) delivered a rather subdued first-quarter earnings report, sending ripples of concern through the EV market. With deliveries reaching a mere 9,689 vehicles, accounting for just under 10% of their ambitious 100,000 vehicle target for 2024, the question on everyone's mind is: can VinFast pull off this audacious goal?

While analysts focus on the seemingly disappointing start, a deeper dive into the transcript reveals a different story, a whisper strategy hidden beneath the surface. VinFast appears to be deliberately playing possum, meticulously laying the groundwork for an explosive second half of 2024. Their quiet confidence, evident throughout the call, hints at a calculated, multi-pronged approach designed to unleash a surge in sales later this year.

The first element of this whisper strategy is their aggressive expansion into new markets, particularly in Southeast Asia. Madame Thuy Le, CEO of VinFast, emphasized the company's focus on Indonesia, Thailand, the Philippines, and India – all regions with rapidly growing EV demand. This strategic expansion, coupled with the launch of new, affordable models like the VF 3 and VF 7, positions VinFast to tap into a vast, relatively untapped customer base.

The second piece of the puzzle lies in their innovative dealership model, a stark departure from their initial direct-to-consumer approach. While this shift initially raised eyebrows, it now appears to be a stroke of genius. By leveraging existing infrastructure and the expertise of local dealers, VinFast can rapidly expand their reach and penetration, particularly in the US.

The company reported signing 10 new dealership agreements in the US alone, on top of six pre-existing deals, highlighting the effectiveness of this capital-light model. Furthermore, they are currently evaluating a staggering 82 applications for nearly 150 locations, indicating a robust pipeline of potential dealership partners. This aggressive dealership expansion is poised to significantly boost sales in the coming quarters.

Perhaps the most intriguing aspect of VinFast's whisper strategy lies in their calculated approach to production and inventory management. Recognizing the broader economic headwinds and the potential for weaker near-term EV demand, the company seems to be deliberately controlling inventory levels. They are focusing on building a solid foundation in the first half of 2024, including production ramp-up, new product launches, and finalizing dealership agreements. This cautious approach ensures they are not caught off guard by fluctuating demand and allows them to ramp up production quickly as market conditions improve.

The transcript reveals a fascinating contrast: while analysts express concern about the slower-than-expected Q1 delivery numbers, VinFast executives remain unfazed, repeatedly emphasizing their confidence in achieving the 100,000 vehicle target. This unshakeable belief stems from a clear understanding of their strategic advantages:

A diverse product lineup: VinFast's range of models, spanning multiple segments and price points, allows them to cater to a wider customer base, both domestically and internationally. Cost optimization initiatives: Their relentless focus on cost control, targeting a 40% reduction in per-unit costs within two years of launch, positions them to offer competitive pricing while maintaining healthy margins. A capital-light dealership model: This strategy allows for rapid expansion with minimal capital expenditure, a crucial advantage in the current economic climate. A focus on high-growth markets: By prioritizing Southeast Asia and other emerging economies, VinFast is tapping into regions with significant EV growth potential.

The hypothesis here is straightforward: VinFast is deliberately playing the long game. They are not chasing short-term gains but are instead meticulously building a sustainable business model that can withstand market fluctuations. Their whisper strategy, based on a calculated approach to expansion, production, and cost control, is designed to unleash a surge in sales in the second half of 2024, silencing the doubters and solidifying their position as a serious contender in the global EV market.

VinFast's Global Expansion Strategy

VinFast is aggressively expanding its dealership network and targeting key emerging markets for growth. The following table summarizes their planned expansion:

Projected Sales Cadence for 2024

Based on VinFast's statements during the Q1 2024 earnings call, we can infer their projected sales cadence for the remainder of the year. The following chart represents a hypothetical sales distribution based on their comments:

The numbers paint a compelling picture: 400,000 points of sales globally by the end of 2024, with 130 in North America alone 40% reduction in per-unit cost within two years of each model's launch Existing capacity to manufacture up to 300,000 EVs annually

These figures, coupled with their unwavering confidence and strategic positioning, suggest VinFast's whisper strategy is more than just a gamble. It's a calculated move, a carefully orchestrated symphony of expansion, innovation, and cost control designed to catapult them into the upper echelon of the EV world.

While the jury is still out on whether VinFast can achieve their ambitious target, their whisper strategy, hidden beneath the surface of a seemingly disappointing first quarter, signals a company playing possum, biding their time, and waiting to strike. The second half of 2024 will be the proving ground, the moment of truth for VinFast's whisper strategy. And for those who haven't been paying close attention, it may just be too late to get in on the ground floor.

"Fun Fact: VinFast's parent company, Vingroup, is a Vietnamese conglomerate that started as a producer of instant noodles in Ukraine. It has since expanded into a wide range of industries, including real estate, retail, tourism, and now, electric vehicles."