With India being the third-largest car market globally and its EV penetration still at a nascent stage, VinFast sees immense potential for growth in Battery Electric Vehicle (BEV) adoption.
It’s raining EVs In India; Vietnamese automaker VinFast (with an $18 billion valuation) is said to be actively searching for suitable land, thus making its entry into the electric vehicle (EV) market in India.
The decision closely follows Tesla which expressed its excitement about the Indian market and committed to commence operations following discussions with Prime Minister Narendra Modi.
India ranks as the third-largest car market globally and has immense potential with significant room for growth in Battery Electric Vehicles (BEV); thus, the company has begun assessing potential locations for its manufacturing facility, and it has already considered two sites in Tamil Nadu.
The proposed sites include the Manalur region north of Chennai and Tuticorin in one of the state’s southernmost districts; at the same time, VinFast is also planning to evaluate plots in Gujarat, as they require access to a port, however Tamil Nadu’s East-West connectivity makes it an appealing option.
The importance of sea lines of communication (SLOCs) in the Indian Ocean is substantial, as these routes facilitate maritime cargo transportation and Tamil Nadu stands out for its three major ports, including Chennai Port and Tuticorin, making it a vital hub for exports and imports.
VinFast aims to invest around $200 million in establishing its manufacturing facility in India, with a goal to begin assembling vehicles by 2026.
The company views the Indian market as one with “tremendous potential” and plans to build facilities with a capacity of up to 50,000 cars per year in Phase I.
At the same time, Indonesia also has the company’s focus, where it intends to establish another facility for production in 2026, stating that both India and Indonesia offer promising opportunities due to their low EV penetration and the potential for increased adoption.
While there is not much in terms of the specific details about the Indian plant’s location and investment plan yet, however, VinFast intends to create Completely Knocked Down (CKD) facilities in both Indonesia and India as these facilities can provide access to government incentives, reduced tariffs and taxes, and access to raw materials at favourable rates.
