Tesla-rival VinFast to enter India with locally assembled EVs
Vietnamese EV manufacturer VinFast is preparing to penetrate the Indian market with locally assembled models. This marks a significant shift from its initial strategy of selling only imported EVs. This strategic move follows the accelerated completion of VinFast's new factory in Tamil Nadu, which is expected to be operational six months ahead of schedule, in the first half of 2025. The company plans to launch its first locally assembled car in 2025, targeting the premium affordable segment (₹25-30 lakh).
VinFast's strategic approach to Indian EV market
VinFast's decision to adopt the completely knocked down (CKD) route for its entry into India is a strategic move to avoid high import duties. This approach will allow the company to offer its EVs at competitive prices, as CKD kits attract only a 15% duty compared to 100% on car models with a CIF value over $40,000. "The local assembly of models gives greater confidence to suppliers, dealers, and buyers," reported the Economic Times, citing an anonymous source.
VinFast awaits India's new EV policy guidelines
While VinFast's entry into the Indian market does not hinge on the new EV policy announced by the Indian government, the company is eagerly awaiting its guidelines. The first meeting between EV companies and government officials to discuss this policy occurred on April 19, with a VinFast representative present. The new policy offers import duty concessions to automakers who establish manufacturing units in India with a minimum investment of $500 million.
VinFast's investment and production plans in India
VinFast plans to invest over ₹4,150 crore ($500 million) over the next five years to construct a 150,000-unit-a-year factory at Thoothukudi, near Chennai. The 400-acre facility is expected to employ between 3,000 and 3,500 workers in its initial phase. This investment plan aligns with the memorandum of understanding VinFast has signed with the Tamil Nadu government.
VinFast's anticipated impact on Indian EV market
VinFast anticipates that its local assembly and competitive pricing will help it to reach a peak capacity of 50,000 units in its first year of operations. The company expects the Indian electric car market to conclude the current calendar year with 150,000 units, up from 90,000 units in 2023. VinFast is set to reveal its plans for India at the Bharat Mobility Global Expo scheduled for January 17-22, 2025.
