VinFast Shifts Focus to Asia: Expansion Plans in India and Indonesia

VinFast, Vietnam’s electric vehicle (EV) powerhouse, has made bold moves to establish itself as a global player. Following a high-profile entry into the U.S. market and a landmark public listing on the Nasdaq, the company is now shifting gears toward Asia. India and Indonesia—two of the world’s fastest-growing EV markets—are now central to its international strategy.

This pivot reflects not only an operational recalibration but also a broader realignment with regional demand, regulatory support, and scalable growth potential.

The U.S. expansion: Strong sales, mounting losses

VinFast’s foray into the U.S. market initially grabbed global attention. In 2023, it delivered around 33,333 electric vehicles in the United States. That figure nearly tripled in 2024, with 97,399 vehicles sold, representing a 192 percent year-on-year increase. Despite this rapid sales growth, the company posted a net loss exceeding US$3 billion in 2024, underscoring the high cost of scaling production and establishing brand recognition in a highly competitive market.

With established rivals like Tesla dominating consumer mindshare and newer entrants ramping up innovation, VinFast faced growing pressure to optimize its global strategy.

Why Asia offers a more strategic path forward

By turning to Asia, VinFast is aligning itself with regions where demand is accelerating, regulatory support is stronger, and manufacturing can be localized more efficiently. India and Indonesia, in particular, offer vast market potential with governments actively promoting EV adoption and infrastructure development.

The company’s decision to launch full-scale operations in these countries is a calculated move to strengthen its regional foothold while avoiding the steep operational costs and branding hurdles faced in Western markets.

VinFast’s multi-billion-dollar commitment to India

India’s EV market is experiencing a dramatic transformation. Valued at approximately US$8.03 billion in 2023, it is forecast to grow to US$117.78 billion by 2032, at a compound annual growth rate (CAGR) of 22.4 percent. This expansion is driven by strong government incentives, rapid urbanization, and a nationwide push toward clean transportation.

VinFast has committed US$2 billion to building a state-of-the-art manufacturing plant in Tamil Nadu. Slated to open by June 30, 2025, the facility will have a production capacity of 150,000 vehicles per year and is expected to create between 3,000 to 3,500 jobs.

The Indian government’s “Make-in-India” initiative, along with FAME II subsidies and tax breaks for EV manufacturers, has made the country a prime target for global automakers looking to localize production and tap into the booming demand for electric scooters, cars, and three-wheelers. Electric two-wheelers dominate India’s EV sales, with a national adoption rate of 4.4 percent, peaking at 11.5 percent in Delhi and 11.1 percent in Kerala.

Tapping Indonesia’s EV potential with a US$200 million bet

Indonesia, Southeast Asia’s largest economy, is also rapidly emerging as an EV growth engine. While the current market size stood at US$533.19 million in 2022, it is expected to reach around US$2.02 billion by 2029, with a CAGR of 20.96 percent.

VinFast has announced a US$200 million investment into an EV manufacturing facility in West Java. With operations expected to begin in October 2025, the plant will have an annual production capacity of 50,000 vehicles and create thousands of local jobs.

Despite relatively low adoption at present — only 7 percent of Indonesian consumers own EVs as of 2024 — interest is surging, with 78 percent expressing intent to purchase one within the next five years. Government incentives, tax exemptions, and the country’s rich nickel reserves (crucial for battery manufacturing) all reinforce Indonesia’s strategic role in Southeast Asia’s EV supply chain.

Strengthening Vietnam’s industrial presence in Asia

These major investments not only enhance VinFast’s reach but also help anchor Vietnam within Asia’s evolving industrial and energy transition landscape. By establishing production hubs in India and Indonesia, VinFast can benefit from regional trade agreements, including ASEAN’s zero-tariff trade zones, and tap into expanding intra-Asian logistics routes.

For Vietnam, this move reflects a maturing industrial policy—shifting from export manufacturing to outward investment and multinational value chain integration.

Strategic shift with realistic expectations

VinFast’s pivot eastward reflects strategic realism. Building plants in Asia reduces reliance on expensive Western distribution, shortens supply chains, and aligns with local consumer demand and policy trends.

Still, challenges remain. Regulatory hurdles, infrastructure gaps, and the need for localized product development will require careful navigation. In both India and Indonesia, competition from regional and Chinese brands will test VinFast’s agility and brand strength.

But if executed well, this strategy could position VinFast as Southeast Asia’s leading EV manufacturer, not just as a bold experiment from Vietnam, but as a lasting presence in the future of mobility.

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