Vietnamese electric vehicle maker VinFast plans to speculate as much as $1.2 billion in Indonesia to expand its operations in Asia in a second phase, amid growing competition within the United States.
The company identified Indonesia as one in all its key potential markets amongst seven latest market clusters. They see huge potential in Indonesia to determine electric automobile and battery production facilities, not only due to its relatively low costs, but in addition since the country has abundant resources of nickel, a key ingredient for producing electric vehicle batteries.
Broadening your horizons
VinFast plans to launch its business operations in Indonesia in 2024 with the launch of the VF e34 and VF 5 right-hand drive models. These two models might be followed by the VF 6 and VF 7.
VinFast plans to speculate roughly USD 150-200 million to construct a production plant in Indonesia, which is anticipated to be operational in 2026. The plant’s production capability is anticipated to be between 30,000 and 50,000 cars per 12 months. The plan was announced in the corporate’s filing with the U.S. Securities and Exchange Commission.
The Indonesian plant might be VinFast’s third, joining an existing facility within the northern port city of Haiphong, Vietnam, and a brand new facility in North Carolina, United States, which began construction in July.
Apart from Indonesia, VinFast can also be other markets in Asia reminiscent of India and Malaysia. It also sees opportunities in other global markets, including the Middle East, Europe, Africa and Latin America, covering roughly 40-50 potential markets worldwide. This is an ambitious step in the event of VinFast’s business. From 2024, they are going to cooperate with importers and distributors in these regions. In the long run, VinFast is even considering establishing distribution firms in these markets.
Although VinFast’s fundamental market is Vietnam, it has also successfully reached North America and three European countries, namely France, Germany and the Netherlands.
VinFast itself caught the world’s attention when its shares were listed on the Nasdaq Stock Exchange through a Special Purpose Acquisition Company (SPAC). Despite the stock price falling 3.56% to $16.56 per share as of 10:55 a.m. EST on Wednesday, its total enterprise value stays high at $38.34 billion. That’s despite the stock price skyrocketing to $87.83 per share on Aug. 28, fueled by investor enthusiasm and restricted stock outstanding.
As of June 30, VinFast has sold a complete of 18,700 electric vehicles, most of them in Vietnam. Of these, 7,100 vehicles were sold to Vietnamese taxi company GSM Green and Smart Mobility Joint Stock Co.
Indonesian enterprise
According to the Indonesian Automotive Industry Association (GAIKINDO), sales of electrical cars in Southeast Asia’s most populous country have increased significantly over the past three years.
In 2010, sales of electrical cars in Indonesia amounted to only 125 units. In 2021, this number increased to 687 units, with a giant jump in 2022 when over 10,300 electric vehicles were sold. In the primary half of 2023, Indonesia recorded sales of 5,850 electric cars.
The Indonesian government has also significantly boosted the event of EVs for on a regular basis use by announcing a ten percent subsidy for EV buyers during this era.
Although several brands have already entered the Indonesian market, only two brands, Wuling Motors and Hyundai, hold the most important market share, providing VinFast with significant competitive opportunities.
