Vietnamese EV Maker Plans $1.2 Billion Indonesian Investment

2023-09-13 15:25

VinFast Auto Ltd. plans to invest as much as $1.2 billion in Indonesia “in the long-term” as it

VinFast Auto Ltd. plans to invest as much as $1.2 billion in Indonesia “in the long-term” as it looks to expand in Southeast Asia after entering the US auto market.

The investment will include $150 million to $200 million for an Indonesian production facility to begin operating in 2026 with a manufacturing capacity of 30,000 to 50,000 cars per year, the Vietnamese EV maker said in a F-1 filing with the US Securities and Exchange Commission.

VinFast plans deliveries of its VF e34 and VF 5 models in Indonesia next year, according to the filing.

The company, which went public in the US via a special-purpose acquisition company merger in August with blank-check company Black Spade Acquisition Co., identifies Indonesia as a “key potential market” for EV and battery manufacturing facilities because of low costs and availability of domestic raw materials, it said in the filing.

Read: Vietnamese EV Maker VinFast Surges in Nasdaq Trading Debut (3)

VinFast shareholders Vietnam Investment Group (VIG) and Asian Start Trading & Investment Ltd. are planning to reduce their stakes in the co., according to the filing, which didn’t provide further details.

VIG held 33.5% of the company and Asian Star Trading & Investment Ltd. had a 15% stake, according to a separate filing in March. Each of these shareholders is majority owned by Vuong.

VinFast, which began building a factory in North Carolina in July, forecasts sales will reach 45,000 to 50,000 this year. Founder Pham Nhat Vuong, Vietnam’s wealthiest citizen, has said the company will break even by the end of 2024. In May, VinFast recalled all its electric sport utility vehicles in the US over a software malfunction. The company also cut some of its US workforce amid modest sales.

As of June 30, VinFast had sold a cumulative 18,700 electric vehicles, mostly in Vietnam, according to the filing. It sold 7,100 vehicles to GSM Green and Smart Mobility Joint Stock Co., a Vietnamese taxi company in which Vuong holds a 95% stake.

(Updates the story with reducing stakes in the fifth paragraph.)