VinFast (VFS.US), the Vietnamese Tesla, is expanding in Southeast Asia: reports it is seeking $250mn in bank loans to build a factory in Indonesia.
Wise Money reported that VinFast (VFS.US), a Vietnamese electric vehicle manufacturer, is seeking a $250m bank loan to fund its assembly plant in Indonesia, according to sources. The company has approached Indonesian banks in hopes of securing a loan in US dollars or Indonesian rupiah, the sources said.
The negotiations with banks highlight the ambitions of the fledgling company to expand regionally to compete with other global electric vehicle manufacturers, as competition in the electric vehicle market has become very intense and is eroding the industry’s profitability.
VinFast is pushing its expansion in Asia, and its confidence does not seem to have been dented by the global slowdown in demand for electric vehicles and the tepid progress of its US launch. Pham Nhat Vuong, the founder of VinFast, said in June that the company expects its Indian factory to come online in the first half of next year, six months ahead of its original schedule.
Despite its struggle to establish itself in a competitive electric vehicle market, VinFast has ambitious growth plans. It delivered 9,689 vehicles in the first three months of this year, far behind its target of delivering 100,000 vehicles this year. VinFast delivered 34,855 vehicles in 2023, but most of those were to related parties.
The company is a subsidiary of Vingroup JSC, a Vietnamese conglomerate controlled by billionaire Pham Nhat Vuong. VinFast launched its first product five years ago, and Mr Vuong said in an interview last month that the company would continue to receive his support “until I run out of money”. He dismissed concerns about a global slowdown in demand for electric vehicles, saying: “I’m not worried about the sales of electric vehicles. The growth of electric vehicles is inevitable.”
VinFast signed a deal in January with the Indian state of Tamil Nadu to invest more than $2bn in India in an effort to break into one of the world’s largest car markets. Its Indian factory, which has a $500m initial investment, broke ground in February.
Mr Vuong also said that the company’s Indonesian factory is planned to come online by the end of 2025, six years earlier than its original schedule. He said the initial capacity of the Indian and Indonesian plants is 500,000 vehicles a year, and could be raised to 3m vehicles a year based on market demand.