VinFast to Set Up Shop in Indonesia, Plans to Expand in 7 More Markets in Asia – CleanTechnica

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VinFast is making good its announcement to enter Southeast Asia after CleanTechnica picked up the news that the Vietnamese automaker is planning to set up shop in Indonesia in early 2024. The strategy is to first distribute vehicles to dealer-partners in the country and then build a $200 million plant that will produce electric cars by 2026.

“We plan to commence deliveries of our EVs in Indonesia in 2024 with right-hand driving models of the VF e34 and VF 5, with the VF 6 and VF 7 to follow,” a source at VinFast told CleanTechnica via a private message.

Apart from being the most populous country in the region with 270 million people, Indonesia is also the largest car market with annual sales of over a million vehicles. It is also where the cheapest fuel prices per liter in Southeast Asia is found, ahead of Malaysia. Cheap petrol is seen as one of the reasons why EVs currently number only about 1% of vehicles on its roads.

Indonesia will be a totally different market for VinFast in terms of the build of the vehicle. It is a right-hand drive market and VinFast currently manufactures its VF series EVs all in left-hand drive.

“Right-hand drive is an engineering technicality, and we are equipped to reformat our existing line in order to meet the sales demand of Indonesia,” another source from VinFast engineering team revealed. “When the Indonesia plant is set up it can accommodate both left- and right-hand drive cars.”

This statement confirms what Global CEO of VinFast Auto Ltd. Madame Thuy Le told CleanTechnica in September 2022 when asked the question of manufacturing the right-hand drive markets.

Indonesia is Southeast Asia’s biggest economy, but VinFast has also selected seven more markets in Asia.

“We have also identified seven new market clusters as a key potential market for the potential establishment of manufacturing facilities for our EVs and batteries due to the relatively low cost and availability of domestic raw materials,” CleanTechnica’s source says pointing to left-hand drive markets — Cambodia, Laos, Myanmar, and the Philippines as initial locations for distributors as VinFast is retooling for other right-hand drive countries — Malaysia, Thailand, and Singapore.

A representative from VinFast will visit the Philippines and will join the 11th Philippine Electric Vehicle Summit this coming October to meet with industry leaders and connect with top local EV dealerships too.

Indonesia’s Ministry of Transportation has been introducing incentives to support electrification since 2013. The Low Carbon Emission Vehicle (LCEV) program has helped promote plug-in hybrids and hybrid EVs while Presidential Regulation No. 55/2019 helped push EV development and sales via an end-to-end EV supply chain. The country is also poised to attract global EV makers.

Last August Indonesian Senior Minister Luhut Binsar Pandjaitan said that he met with Tesla chief Elon Musk in San Francisco and that Tesla plans to invest in the processing of the materials needed in the manufacture of batteries in the country, which is rich in nickel and other elements needed.

“Based on our evaluation of the market opportunity in Indonesia, we have set a preliminary investment target of up to approximately $1.2 billion into Indonesia in the long-term. The target includes approximately $150 to $200 million that we envision applying toward the establishment of a CKD (Completely Knocked Down) facility, with production capacity in the range of 30,000 and 50,000 cars per year and a target production start date in 2026,” our source said.

VinFast, owned by the Vingroup, has a Nasdaq listing that is valued at more than $85 billion.

Once it opens its plant in Indonesia, in 2026, it will be the second overseas plant after it launches its North Carolina factory scheduled to start production in 2025. In 2019 VinFast dropped its internal combustion engine line and has announced completely.

In its filing to the U.S. Securities and Exchange Commission, a copy of which CleanTechnica has, VinFast also indicated that it will also open up in India, Malaysia, the Middle East, Africa, and Latin America, and expand its presence in Europe as it identified between 40 and 50 potential markets.