What's Happening?
VinFast, a Vietnamese electric vehicle manufacturer, is making a significant entry into Indonesia's electric scooter market. The company has partnered with seven national-level dealers to establish a strong presence in a market traditionally dominated by internal combustion engines, particularly those from Honda. With its Subang manufacturing complex in West Java now operational, VinFast is positioning Indonesia as a key growth market within the ASEAN region. The company aims to challenge the existing market structure by leveraging its manufacturing scale and integrated energy strategy. This move aligns with the Indonesian government's target of having 13 million electric motorcycles on the road by 2030, a demand that smaller local players cannot
meet alone.
Why It's Important?
VinFast's entry into the Indonesian market is significant as it challenges the long-standing dominance of Japanese manufacturers like Honda and Yamaha, which control over 70% of the market. The Indonesian government's push for electric vehicles creates a new demand curve that traditional internal combustion platforms are ill-equipped to serve. VinFast's approach includes a vertically integrated model covering manufacturing, vehicles, batteries, charging, financing, and after-sales services. This comprehensive strategy not only addresses the affordability barrier but also shifts infrastructure risk away from consumers. By securing partnerships with major financial institutions, VinFast ensures that access to credit, a critical factor in adoption, is integrated from the start.
What's Next?
VinFast plans to roll out its electric scooters in Indonesia starting in the second quarter of 2026, beginning in the Jabodetabek area. The company aims to achieve over 40% localization by the end of 2026, increasing to 80% by 2030, aligning with Indonesian industrial policy objectives. This localization strategy is crucial for embedding VinFast into the local political economy and ensuring long-term competitiveness. The company is also working with V Green, its global charging and energy infrastructure arm, to deploy charging and battery swapping stations across Indonesia, addressing one of the core bottlenecks in electric two-wheeler adoption.
Beyond the Headlines
VinFast's strategy in Indonesia reflects a broader regional plan to lead electric two-wheeler adoption across Southeast Asia, including markets like the Philippines, India, Thailand, and Malaysia. The company's focus on manufacturing scale and integrated services positions it as a formidable player capable of disrupting established market dynamics. By transforming the scooter from a capital good into a mobility service through a battery subscription model, VinFast is redefining consumer relationships with electric vehicles. This approach not only enhances affordability but also aligns with global trends towards sustainable and service-oriented mobility solutions.
