Vietnamese electric car manufacturer VinFast has unveiled its ambitious plans to set up production operations in Indonesia by 2026, according to a recent filing with the US Securities and Exchange Commission (SEC). This strategic move is part of VinFast's broader expansion into international markets, marking a significant milestone in the company's growth trajectory.
In the filing, VinFast outlined its commitment to invest up to approximately $1.2 billion in Indonesia over the long term. A substantial portion of this investment, ranging from $150 million to $200 million, will be allocated to the construction of a state-of-the-art manufacturing plant with an anticipated annual production capacity ranging between 30,000 to 50,000 electric vehicles. The plant is scheduled to commence operations in 2026.
VinFast's decision to establish a presence in Indonesia is fueled by the country's potential as a key market for electric vehicles (EVs) and battery production. The company cited Indonesia's advantages, such as the accessibility of low-cost domestic raw materials, as a driving factor behind this expansion initiative.
As part of its initial entry into the Indonesian market, VinFast plans to introduce its e34 and VF 5 models in the country in the coming year. Subsequently, the VF 6 and VF 7 models are slated for release at a later date.
VinFast's global expansion ambitions do not stop at Indonesia. The SEC filing also revealed the company's intentions to enter markets in India, Malaysia, the Middle East, Africa, and Latin America as early as 2024. Additionally, VinFast is committed to expanding its presence in Europe and exploring further opportunities in the region.
The proposed Indonesian facility will mark VinFast's third production plant, following its primary facility in the northern Vietnamese city of Haiphong and a newly established plant in the US state of North Carolina, set to commence operations in 2025. As of June 30, 2023, VinFast reported the sale of a total of 18,700 electric vehicles, primarily within Vietnam. The company made its debut on the US stock exchange Nasdaq in August 2023.
VinFast's move to establish operations in Indonesia mirrors a broader trend in the automotive industry, with several prominent manufacturers eyeing the burgeoning Indonesian market. Tesla, for instance, has previously announced plans to construct a battery factory in the region, while Hyundai Mobis and the Volkswagen Group are also considering battery assembly plants. South Korean cell manufacturer SK On is actively involved in plans for a nickel supply chain, and the South Korean government has pledged joint investments with the Indonesian government to foster this growth.
VinFast's foray into Indonesia represents a significant development in the global electric vehicle landscape, reflecting the company's commitment to sustainable mobility solutions and its determination to become a major player on the international stage.