Indonesia’s president slipped into a white VinFast on the weekend, giving the Vietnamese electric vehicle producer its boldest stamp of approval yet to expand to Southeast Asia’s biggest economy.
Joko “Jokowi” Widodo’s state visit to Vietnam included a factory tour with VinFast CEO Pham Nhat Vuong, who is pushing into Indonesia with manufacturing, ride-hailing, and taxis. Analysts say the move complements nickel-rich Indonesia’s own EV roadmap, while offering a possible toehold for the Nasdaq-listed carmaker’s broader retail play across the Association of Southeast Asian Nations (ASEAN).
But the new plan for a factory in Indonesia would be VinFast’s fourth, in addition to US and Indian plants, even as the main facility in Vietnam operates below capacity. It can produce 250,000 EVs a year, while VinFast delivered 21,342 in the first three quarters of 2023, including at least 7,100 to Vuong’s taxi company, GSM.
“It is a right decision as Indonesia is the biggest automobile market in ASEAN and [VinFast] can export their EVs to another nine ASEAN countries as well,” Vu Tan Cong, deputy general director of Vietnam Automobile Industry and Trade Consulting, told Nikkei Asia of the expansion.
After Vuong shepherded Jokowi around in a golf cart, VinFast announced a deal with Gojek “to promote the use of EVs among drivers of four-wheel vehicles” using the ride-hailing app in Indonesia. It did not give details, but VinFast made its ride-hailing debut in 2023 when GSM offered its all-VinFast taxi service through Vietnamese ride-hailing platform Be Group, whose drivers also got discounts to buy VinFast EVs.
The Vingroup arm in October said it would spend roughly $200 million on an assembly plant in Indonesia but has upped its investment to at least USD 1.2 billion “over the long term” for a fully-integrated site to manufacture cars and batteries, a spokesman told Nikkei. VinFast made a similar upgrade in the Indian state of Tamil Nadu, with the potential to invest up to USD 2 billion.
It faces heavy competition from Malaysian EV makers Proton and Perodua, in addition to Chinese giants spreading throughout Southeast Asia. A regional EV landscape is starting to take shape as Thailand and Indonesia bid to transition their historic dominance in gasoline-powered cars into the electric age.
“Indonesia wants to take a central position in the EV supply chain and has abundant natural resources for the production of electric vehicles,” said Pritesh Samuel, head of business intelligence at Dezan Shira & Associates. “This bodes well for both sides as VinFast seeks to expand its EV manufacturing presence and as Indonesia seeks to become an EV hub.”
GSM launched in Vietnam in April, added next-door Vientiane in Laos to its markets and will next head to Indonesia. The EV car and scooter taxi and rental company founded by Vietnam’s richest man said on January 13 it will invest USD 900 million in the archipelago nation “in the near future” while also working with Gojek.
VinFast says it uses the taxi affiliate to expose newcomers to its EVs.
“GSM plans to expand its operation into our key international markets,” VinFast said in a filing with the US Securities and Exchange Commission on October 31. “This would provide us with a significant opportunity to offer international customers the chance to test drive and experience our vehicles.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.