Vietnamese electric vehicle maker VinFast plans to invest up to $1.2 billion in Indonesia as it looks to expand operations in Asia in the second business phase and is facing steep competition in the U.S.
The Vietnamese EV player plans to pour approximately $150-200 million to establish a Completely Knocked Down (CKD) facility in the neighboring country with production capacity of between 30,000 and 50,000 cars per year, the firm said in a filing to the U.S. Securities and Exchange Commission.
This will be VinFast's third facility besides its existing one in the northern port city of Haiphong in Vietnam and a new plant in the U.S.’s North Carolina, which kicked off its construction in July.
VinFast plans to start deliveries of its EVs in Indonesia, whose population is nearly triple that of Vietnam, in 2024 with right-hand driving models of the VF e34 and VF 5, to be followed by the VF 6 and VF 7.
The firm said it has identified Indonesia from among seven new market clusters as a key potential market for the potential establishment of manufacturing facilities for its EVs and batteries due to the relatively low cost and availability of domestic raw materials.
The other Asian markets include India and Malaysia. Other potential markets are the Middle East, the rest of Europe, Africa and Latin America, among between 40 and 50 globally.
VinFast also plans to sell its cars across Asia, Europe and the Middle East starting 2024 through importers and distributors. It may consider establishing distribution companies in these markets in the long term.
Besides its main market Vietnam, VinFast is selling cars in North America and three European countries namely France, Germany and the Netherlands.
VinFast last month managed to list its shares on Nasdaq through a SPAC. Its shares were down 3.56% as of 10:55 a.m. EDT Wednesday at $16.56 each, valuing the firm at $38.34 billion, after losing 44.6% last week. Its stock peaked at $87.83 a share on August 28 on the back of investor hype and its low float.
Its parent firm Vingroup, whose chairman Pham Nhat Vuong was the first billionaire in Vietnam, and related shareholders hold more than 99% in it.