Vietnam Plans To Build An Electric Vehicle Factory In Indonesia, This Is The Total Investment

Rupiah illustration (photo: dock. Antara)

JAKARTA - The Ministry of Industry (Kemenperin) will facilitate the plan of an automotive manufacturer from Vietnam, VinFast, who wants to invest in Indonesia.

This total investment will be realized in the amount of 1.2 billion US dollars to produce electric vehicles in Indonesia.

"We really appreciate VinFast's investment plan, because it will support the development of the electric vehicle ecosystem in Indonesia. Considering that the potential is great in Indonesia," said Minister of Industry (Menperin) Agus Gumiwang Kartasasmita in a written statement received by VOI, Saturday, January 13.

During his working visit to Vietnam, in addition to accompanying the agenda of the President of the Republic of Indonesia Joko Widodo (Jokowi), Minister of Industry Agus started a meeting with representatives from VinFast, which was attended by Manufacturing Division Deputy CEO of VinFast Ph.m. Nht Qumen Anh, CEO of VinFast Indonesia & Malaysia Tr. Quc Huy, Director of GSM-Xanh SM Nguymenmen Vmen Thanh and Senior Assistant to the Chairman of International Relations Director Nguy'nc Thanh.

Meanwhile, said Minister of Industry Agus, VinFast said that Indonesia is one of the countries that has a conducive business climate.

This made VinFast interested in disbursing his funds in the early stages of factory construction amounting to 200 million US dollars which will start this year.

"VinFast is identifying a suitable location to set up a factory in Indonesia. The land needs are around 240 hectares (ha)," he said.

The total factory capacity will reach 50,000 units per year, with a target of absorbing 1.000-3,000 workers. This factory will operate in 2026.

According to Agus, VinFast will collaborate with domestic companies for the production process. In addition, partnering with transportation companies and technology service providers in the context of expansion for electric taxi vehicles.

"VinFast is also interested in making electric buses, they even want to invest in IKN," he said.

Regarding VinFast's investment plan, the Indonesian government will provide a number of incentives that can be utilized by the company. Including for the electric vehicle industry such as tax holidays, tax allowance facilities, import duty incentives and Luxury Goods Sales Tax (PPnBM) incentives.

The VinFast electric car with the right steering wheel, including VF 5 and VF 6 will enter the market in Indonesia this year. This is the company's step to test the market with imported CBU, through a zero percent import duty tax facility and zero percent luxury goods tax as regulated in the Minister of Investment Regulation (BKPM) Number 6 of 2023.

In addition, zero percent Luxury Goods Tax facilities can also be utilized, if they reach the minimum requirements of local content as mandated by Presidential Regulation (Perpres) Number 79 of 2023.