*

Net loss widened to $773.5 million in Q2, up 27.3% from Q1

*

Revenue rose 33% quarter-on-quarter to $357 million

*

Chairwoman: VinFast to stick to 80,000 units sales

guidance, eye

to deliver 20,000 units of mini SUV VF 3 this year

(Recasts, adds quotes from chairwoman, details)

By Zaheer Kachwala and Phuong Nguyen

Sept 20 (Reuters) - Vietnamese electric vehicle maker

VinFast's losses widened in the second quarter due to

rising costs linked to its overseas expansion and impairment

charges, although its revenue rose, it reported on Friday.

VinFast, which started to deliver cars in California last

year, said it made a net loss of $773.5 million in the

April-June period, an increase of 27% from the first quarter and

40% bigger than the same period last year.

Revenue jumped 33% quarter-on-quarter to $357 million but

its deepening loss underscores the risks of VinFast's aggressive

expansion strategy - which could have repercussions for its

parent company Vingroup.

"We are still a startup so we expect to have losses for a

couple more quarters," Thuy Le, VinFast's chairwoman, told

Reuters in an interview.

"However the industry is driven by volumes. As we increase

the volumes and optimize the costs, we should be able to get to

even and profitability," she added.

Selling expenses rose by 25.5% quarter-on-quarter due to

increasing sales and marketing costs, coupled with asset

impairments, according to the filing.

The EV maker's gross margin stood at negative 62.7% in the

second quarter, primarily due to an impairment charge of $104

million on the net residual value of its vehicle inventories, up

from $5 million in the previous quarter.

Nevertheless according to Thuy, excluding these factors, its

gross margin still improved.

In July, VinFast halted its $2 billion manufacturing complex

project in North Carolina until 2028 due to challenging market

conditions. The company also reduced its delivery target for

this year to 80,000 vehicles from the initially planned

100,000.

Deliveries in the first half of 2024 stood at 22,348

vehicles, well below the full-year target, and half of those

deliveries were made to related parties including its taxi

operating affiliate GSM mostly owned by VinFast's founder.

VinFast has been expanding aggressively to Asian markets

such as Indonesia or the Philippines to capitalize on growing

demand for electric vehicles in those regions and offset softer

demand in the United States.

However, the company is betting on home market Vietnam for

the remainder of the year, with deliveries of its mini SUV VF 3

and city model VF 5.

"We are confident about the 80,000 deliveries guidance for

this year with most of the sales driven by the Vietnam market,"

Thuy said, adding the EV maker got more orders for the VF 3 than

it could fulfil and could only deliver 20,000 units this year.

Shares of VinFast fell 2.02% to $3.88 apiece in pre-market

trade on Nasdaq on Friday. The shares have dropped more than 50%

since January.