VinFast Auto Ltd (VFS) posted impressive 74% year-over-year growth in third-quarter deliveries, and according to Chardan Research, the Vietnamese electric vehicle maker appears positioned to nearly double its total deliveries this year.

Analyst James McIlree maintained his Buy rating on the stock with a $5.50 price target, noting that with roughly 95% of deliveries concentrated in Vietnam's domestic market, VinFast is likely heading toward 185,000 total deliveries in 2025.

The financial picture is getting more interesting. Average selling prices climbed from $16,700 in the second quarter to $17,400 in the third quarter. McIlree pointed out that while about half of Vietnam deliveries involve the company's lowest-priced vehicles, sales of the Herio Green—a considerably pricier model—likely pulled the average upward.

Here's where things get crucial for investor sentiment: gross margins. The reported figure looks brutal at -56.2%, but strip out delayed revenue recognition and net realizable value adjustments, and you get an adjusted gross margin of -17.1% for the third quarter. That's actually an improvement from -20.8% in the previous period.

"This is a critical issue for the company as improvements in gross margin, reported and adjusted, will be a key driver of investor sentiment and confidence in the company's ability to reach cash flow breakeven," McIlree wrote.

Translation: VinFast is still burning money, but the trend line matters. If margins keep moving in the right direction, the company might eventually convince investors it can reach profitability without requiring endless capital infusions.

Shares of VinFast Auto declined 1.73% to $3.17 on Monday.