Vietnam’s electric vehicle manufacturer, VinFast, is set to expand its presence into seven Asian countries, including Indonesia. The company plans to commence sales in Indonesia in 2024 and establish a factory by 2026.
Established in 2017, VinFast Auto Ltd. is a Singapore-based multinational automotive company founded by Vingroup, one of the largest private conglomerates in Vietnam that was founded by Phạm Nhật Vượng.
In a disclosure to the U.S. Securities and Exchange Commission (SEC), VinFast revealed its intention to invest US$ 1.2 billion, equivalent to approximately IDR 18.4 trillion, in the Indonesian market in the long term.
Reuters reports that around US$ 200 million, or IDR 3.07 trillion, of this investment will be allocated for the construction of a factory in Indonesia.
The electric vehicle factory is expected to begin production in 2026, with a capacity ranging from 30,000 to 50,000 units per year.
Indonesia, as the largest economy in Southeast Asia, has become an attractive destination for global electric vehicle manufacturers.
This is due to Indonesia’s vast reserves of nickel ore, a crucial raw material for electric vehicle battery production.
VinFast recently made its debut on the Nasdaq stock exchange in August. The automotive company achieved a valuation of US$ 85 billion during its initial public offering (IPO), surpassing the valuations of both Ford at US$ 48 billion and GM at $46 billion.
In addition to its expansion plans in Indonesia, VinFast is poised to enter the markets of India, Malaysia, the Middle East, Africa, and Latin America.
VinFast’s expansion plans in Indonesia add excitement to the domestic electric vehicle market. Hyundai Motor Group from South Korea is already building electric vehicle and electric vehicle battery factories worth US$ 1.5 billion. Furthermore, Chinese electric vehicle manufacturer Wuling Motor has invested US$ 1 billion in establishing electric vehicle and supply chain factories.
The Indonesian government has also secured investment commitments from various global automotive manufacturers targeting the electric vehicle supply chain in the country.
Febrio N. Kacaribu, the Head of Fiscal Policy Agency (BKF) at the Ministry of Finance, mentioned that the government has successfully secured investment commitments in the electric vehicle supply chain worth US$ 20.3 billion, or approximately IDR 304.5 trillion, for the period of 2021-2024.
Approximately US$ 15 billion of this total commitment is designated for investments in the electric vehicle battery sector.
