Gotrade News - VinFast is leaning on a planned IPO of its Green SM electric taxi unit and aggressive Southeast Asia expansion to reach profitability by 2027. The push comes as Indonesia introduces a new EV tax and prepares a Rp5 million electric motorbike subsidy still awaiting final approval.
--- - Indonesia's EV tax took effect in April 2026, potentially raising vehicle prices 5-15% and slowing demand. - A Rp5 million electric motorbike subsidy is still being finalized through a Ministry of Finance regulation. - VinFast targets 300,000 EV deliveries in 2026 and plans a 2028 IPO of its Green SM taxi unit. ---
Indonesia's Industry Minister Agus Gumiwang Kartasasmita confirmed that technical discussions on the motorbike subsidy continue between his ministry and the Finance Ministry. The exact subsidy amount and distribution mechanism are still being finalized in a Ministry of Finance regulation.
The minister considers the Rp5 million figure reasonable for accelerating EV adoption in Indonesia. The government is also weighing incentives for other types of electric vehicles beyond motorbikes.
The subsidy initiative aims to strengthen national energy security and reduce reliance on imported fuel. The actual number of supported units will depend on final budget allocations from the Finance Ministry.
At the same time, Indonesia's EV tax took effect in April 2026 under Ministerial Regulation No. 11/2026, ending automatic tax exemption for battery electric vehicles. ITB academic Yannes Martinus Pasaribu warned that prices could rise 5-15% depending on region.
Yannes projects national EV sales will decline materially in the second and third quarters as buyers wait for clarity. Many consumers are postponing purchases until regional governments confirm partial or full tax relief options.
Indonesia's EV market had previously grown rapidly with sales up 95.9% in the first quarter of 2026. The central government has delegated tax relief authority to regional administrations based on local fiscal capacity.
Globally, VinFast (VFS) reported losses of USD3.9 billion (around Rp67.35 trillion) despite doubling unit sales last year. The company targets 300,000 EV deliveries in 2026, with two-thirds expected to be absorbed by Vietnam's domestic market.
The break-even target has been pushed to around 2027-2028 from earlier guidance, with management citing heavy international expansion costs. Aggressive market-penetration pricing has weighed on margins despite strong volume growth.
Founder Pham Nhat Vuong said the IPO of Green SM, the company's electric taxi unit, is planned for the second half of 2028. The listing is expected to deliver significant value back to parent group Vingroup.
VinFast is expanding into Southeast Asia including Indonesia, India, and the Philippines while remaining cautious in the US and Europe. Cost pressure from expansion and intensifying global EV competition remain key challenges for the company.
