EV maker VinFast looks to Indonesia, India for growth after US slump

Indonesian President Joko Widodo, known locally as Jokowi, visited VinFast’s industrial complex on Saturday, as part of a working visit to three Southeast Asian countries. The President also met with Vuong, VinFast’s main financial backer and now its CEO. (Vuong is also the founder of Vingroup, Vietnam’s largest conglomerate)

“We fully support VinFast’s investment plan in Indonesia,” Jokowi said, according to for information from the Secretariat of the Council of Ministers of the Republic of Indonesia. Jokowi promised to “create all the necessary conditions for VinFast to quickly complete the procedures for investment in production and business in the Indonesian market,” notes VinFast. press release.

The company revealed in September that it plans to to invest approximately 1.2 billion dollars in the Indonesian market in the long term. One-sixth, or $200 million, of that investment would go to a factory in Indonesia that would be operational in 2026 and have the capacity to produce 30,000 to 50,000 vehicles a year.

Jokowi is trying to position Indonesia as a hub for EV manufacturing, and analysts expect his successor—to be elected in February—to continue these economic policies. The country produces 37% of the world’s nickel, a key material in batteries used for EVs. Jokowi has called on EV companies and CEOs, such as Tesla and Elon Musk, to build factories and retail stores in the country.

VinFast and GreenSM, a taxi operator also owned by Vuong, they also agreed to help drivers on the Indonesian Gojek platform transition to electric vehicles.

VinFast is also looking further afield. On January 6, the Vietnamese EV manufacturer he announced pledged $500 million toward a new EV manufacturing hub in the Indian state of Tamil Nadu, suggesting its investment could grow to $2 billion.

American flop

VinFast’s decision to invest in its own field follows the lack of success in becoming a player in the US market.

The company sold only 395 cars in the United States in December, according to sales estimates from the auto data company The mind of cars. In the quarter ending September 2023, VinFast’s most recently reported quarter, the company sold just 19,563 EVs, below its target of selling 50,000 vehicles by 2023.

VinFast delivered its first cars in the US in early March to poor reviews. Drivers complained about uneven handling and poor performance.

The company created a stir after its debut on the Nasdaq stock market through a special purpose purchase company (SPAC) last August. Shares of VinFast rose in thin trading, at one point valuing automakers Mercedes-Benz and BMW. Shares are now trading at more than $6, below their peak of $82.35 in late August.

VinFast is to arrange to invest up to 4 billion dollars in a plant near Raleigh, North Carolina, with operations scheduled to begin this year. Still the plant is “sufficient for now,” Le Thi Thu Thuy, VinFast’s chairman and until recently its CEO, told. Nikkei Asia Last week.

Southeast Asia’s EV market may soon be getting more crowded. China’s EV manufacturers are looking to the region to grow as the domestic market begins to slow. China’s BYD, which recently surpassed Tesla in sales of battery-powered EVs, it signifies its intention to expand in Southeast Asia.