VinFast, a Vietnamese electric vehicle (EV) startup, is poised to enter the Indian EV market with a substantial investment of Rs 1,665 crore or $200 million. The company, which recently gained recognition as the world’s third most valuable carmaker, has ambitious plans for India, including the establishment of its own manufacturing facility. VinFast intends to commence production of its EVs in India within the next three years, along with a similar setup in Indonesia.
Founded by Pham Nhat Vuong, Vietnam’s wealthiest individual and the creator of Vingroup, VinFast has rapidly gained prominence. While it hasn’t yet achieved profitability, it made a significant impact on Wall Street with an impressive market value of $85 billion, surpassing the combined valuations of Ford and General Motors. However, its valuation has since experienced fluctuations.
VinFast has provided limited details about its India venture and the specific EV models it intends to introduce. The location of its assembly facility in India remains undisclosed. According to VinFast, its facilities in India and Indonesia will have a combined annual capacity of up to 50,000 cars and an estimated initial capital expenditure of USD 150-200 million, with production expected to commence by 2026. The company also anticipates benefiting from government incentives for local manufacturing, tariff relief, tax exemptions, and access to cost-effective raw materials in these markets.
VinFast had previously initiated its India outreach by recruiting resources and establishing an office in Gurugram, Haryana. The company views itself as a competitor to Tesla, the world’s largest EV manufacturer. This move coincides with Tesla’s impending official entry into the Indian market.
VinFast’s decision to enter India comes at a time when electric vehicles account for just 2% of total auto sales in the country. However, the Indian government has set an ambitious goal to increase this share to 30% by the end of the decade. With the Indian EV market still in its early stages, VinFast’s entry positions it as a frontrunner among foreign EV manufacturers targeting the Indian automotive sector.