Vietnamese start-up VinFast invests $US400m in right-hand-drive electric cars

Vietnamese start-up carmaker VinFast has announced it will spend $US400m on electric vehicle factories in India and Indonesia – both right-hand drive markets – which could open the door for the brand’s arrival in Australian showrooms.

The investment, reported by financial newspaper Nikkei Asia is said to be part of the company’s ambitious plan to expand to 50 countries by the end of 2024.

Each of the two new factories – one in India and the other in Indonesia, both of which are right-hand-drive countries – will initially build 50,000 electric vehicles per year from 2026, the company said.

That’s despite VinFast – which is majority owned by Vietnam’s wealthiest man, Pham Nhat – still yet to turn a profit, despite a restructure after several strategic errors over the past few years.

Australians may know VinFast as the company that purchased the former Holden Proving Ground site at Lang Lang, Victoria, and hired dozens of former Holden engineers and designers after the brand was axed in 2020.

VinFast planned to use Australian engineering expertise from Holden, Ford and Toyota to develop new vehicles for the region, with an engineering office opened in Port Melbourne.

However, the plan was short-lived, with cracks appearing early to see the Port Melbourne office shuttered in May 2021, with staff laid off and the Proving Ground site – which VinFast still owns – put up for sale in September 2021. 

With the decision to close its Australian operations, VinFast head office in Vietnam issued the following statement: "Due to unexpected situations brought about by COVID-19, we have to relocate our operation back to Vietnam to ensure product development progress. In the long-term future, VinFast still considers Australia as one of its strategic markets.”

In 2022, the Australian Federal Government provided $US50 million to VinFast to support the uptake of electric cars, including infrastructure, in Vietnam. The company now has its eyes on Southeast Asia – including Australia – Canada and Europe with its latest investment.

To fund the move, Phan Nhat reportedly plans to sell 46 million shares in the next six months in order to raise $US700 million he has pledged to give VinFast, having already given $US291 million to the company.  

VinFast’s parent company, VinGroup, is also reportedly planning to provide a $US500 million grant to its automotive division, part of which is expected to be assigned to the new factories.   

The new facilities in India and Indonesia are expected to operate as CKD (Completely Knocked Down) assembly lines. Vehicle components and body structures would be shipped to India and Indonesia and then assembled at those facilities. 

The CKD method would see VinFast send vehicles in component form from Hai Phing, Vietnam, to the new factories. 

A focus on North America saw VinFast become the first Vietnamese corporation publicly listed on the NASDAQ in August 2023, after it became the first Vietnamese car maker to export to the US in 2022. 

Reviews of its vehicles have to date been highly critical, with esteemed US automotive publication Road & Track describing VinFast’s VF8, a five-seat electric SUV, as "unfinished", "embarrassing" and "unacceptable".