Vietnam Automotive Company Ready to Build EV Car Factory in Indonesia

Hanoi – Vietnam's electric car manufacturer, VinFast, is prepared to invest US$1.2 billion to establish an electric car factory in Indonesia. 

The government welcomes this plan and is ready to provide various incentives to support the development of the national electric vehicle industry.

"We highly appreciate VinFast's investment plan, as it will contribute to the development of the electric vehicle ecosystem in Indonesia, considering the significant potential here," Minister of Industry, Agus Gumiwang Kartasasmita said in a statement.

The factory, covering approximately 240 hectares, is expected to commence operations in 2026. The production capacity is estimated to reach 50,000 electric vehicles per year, with a workforce of 1,000 to 3,000 people.

The Indonesian government appreciates VinFast's initiative and is set to offer a range of incentives, including tax holidays, tax allowances, import duty incentives, and Luxury Goods Sales Tax (PPnBM) incentives. 

The Completely Knock Down (CKD) or Incompletely Knock Down (IKD) import scheme with a zero percent tariff is also available during the production phase.

As an initial step, VinFast will import right-hand drive electric cars, VF 5 and VF 6, to Indonesia in 2024. 

The zero percent import duty and luxury goods tax facilities make these cars more competitive in the market.

In addition to electric car production, VinFast plans to collaborate with domestic companies and technology service providers to develop an electric taxi network. 

Plans for manufacturing electric buses and investments in the Nusantara Capital (IKN) further strengthen VinFast's commitment to Indonesia.