Heaptalk, Jakarta — Vietnam-based automotive company VinFast announced to inject fresh funds worth US$1.2 billion to construct an electric vehicle (EV) factory in the archipelago.
According to the company, Indonesia is one of the countries that has a conducive business climate. Recognizing the great potential in this market, VinFast will pour its initial funding worth US$200 million for factory construction, which will start this year. This new factory is scheduled to operate in 2026, with a yearly production capacity of 50,000 units. The company also targets to absorb a workforce of around 1,000 – 3,000 people.
In response to this strategic move, the President of the Republic of Indonesia, Joko ‘Jokowi‘ Widodo, delivered, “We fully support VinFast’s investment plans in Indonesia. Electric vehicles are an industry that is developing very rapidly. I hope that this good intention will be realized soon,”
To realize VinFast’s investment plans, the Indonesian Government will provide several incentives that can be utilized by companies in the electric vehicle industry, such as tax holidays, tax allowances, import duty incentives, and Luxury Goods Sales Tax (PPnBM) incentives.
Along with the investment plan, VinFast electric cars (VF 5 and VF 6) will enter the Indonesian market this year. On the other hand, this plan is part of the company’s steps to test the market with Completely Built (CBU) imports through 0% import duty and 0% luxury goods tax following Minister of Investment Regulation No.6 2023.
Currently, VinFast is identifying suitable locations to set up factories in the archipelago, with a total land requirement of around 240 hectares. This automotive company will collaborate with local companies for the production process and partner with transportation companies and technology service providers to expand electric vehicles. VinFast also claims to be planning to build electric buses and intends to take part in investing in IKN.
“VinFast’s expansion into Indonesia will provide more new colors and will also enliven the electrification market in Indonesia.” Said VinFast Indonesia’s Sales and Network Director, Surachman Nugroho, as cited in CNN.
