VinFast and its founder Pham Nhat Vuong had big goals to break into the EV market, and put Vietnam on the map as a car manufacturer. Yet after a chaotic IPO and poor reviews for its cars in the U.S., the Vietnamese EV brand is now signalling its plans to expand in Southeast Asia, and VinFast is looking to the region’s largest economy to help drive that goal.
Indonesian President Joko Widodo, known locally as Jokowi, paid a visit to VinFast’s manufacturing complex on Saturday, as part of a working visit to three Southeast Asian countries. The president also met Vuong, VinFast’s biggest 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 a statement from the Cabinet Secretariat of the Republic of Indonesia. Jokowi promised to “create all necessary conditions for VinFast to quickly complete the investment procedures for production and business in the Indonesian market,” notes a VinFast press release.
The company disclosed in September that it plans to invest about $1.2 billion in the Indonesian market over the long-term. One sixth, or $200 million, of that investment would go towards an Indonesian factory that would be operational in 2026 and have a manufacturing capacity of 30,000 to 50,000 cars per year.
Jokowi is trying to position Indonesia as an EV manufacturing hub, 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 the batteries used for EVs. Jokowi has appealed to EV companies and CEOs, like Tesla and Elon Musk, to build factories and retail outlets in the country.
VinFast and GreenSM, a taxi-operator also owned by Vuong, also agreed to help drivers on Indonesian ride-hailing platform Gojek to shift to electric vehicles.
VinFast is also looking further afield. On Jan 6., the Vietnamese EV maker announced a $500 million commitment towards a new EV manufacturing hub in the Indian state of Tamil Nadu, and suggested its investment could grow to $2 billion.
A U.S. flop
VinFast’s decision to invest in its own backyard follows a lack of success in becoming a player in the U.S. market.
The company sold just 395 vehicles in the U.S. in December, according to sales estimates from the auto data firm Motor Intelligence. In the quarter ending September 2023, VinFast’s most recently reported quarter, the company sold just 19,563 EVs, far below its goal of selling 50,000 vehicles for 2023.
VinFast delivered its first cars to the U.S. in early March to poor reviews. Drivers complained about inconsistent handling and poor performance.
The company caused a stir after its debut on the Nasdaq stock exchange via a special purpose acquisition company (SPAC) last August. VinFast’s stock surged on thin trading, at one point valuing the carmakers more than Mercedes-Benz and BMW. Shares are now trading at just over $6, far below their peak of $82.35 at the end of August.
VinFast is planning to invest up to $4 billion in a plant near Raleigh, North Carolina, with operations planned to start this year. Yet that plant is “enough for now,” Le Thi Thu Thuy, VinFast chairwoman and until recently its CEO, told Nikkei Asia last week.
The Southeast Asian EV market may soon be getting more crowded. Chinese EV makers are looking to the region for growth as the domestic market starts to slow down. China’s BYD, which recently overtook Tesla in sales of battery-powered EVs, is signalling its own intention to expand into Southeast Asia.
