Over a year after announcing setting up of an EV manufacturing facility in Tamil Nadu, Vietnamese EV major VinFast now plans to open it by the end of June.
VinFast’s India plant, located in Tamil Nadu, is part of its $2 Bn investment plan, and a projected annual capacity of up to 1.5 Lakh vehicles.
The company initially targeted the US market for foreign sales, but faced challenges in the market even before the President Donald Trump-induced tariff uncertainty struck.
As a result, VinFast’s founder Pham Nhat Vuong now views better potential in India, Indonesia, and the Philippines than the US, Canada and the EU.
Founded in 2017, VinFast is an EV manufacturer with products ranging from e-SUVs to e-bikes to e-scooters to e-buses.
Despite Vingroup infusing $17 Bn into the EV major since its inception, VinFast remains a loss-making startup, reporting a loss of $1.3 Bn in the fourth quarter of 2024, in the previous quarter.
It competes with the likes of Tesla on the global EV export front, and the Elon Musk-led company has also made initial moves into the Indian market.
VinFast also aims to launch its electric SUV in India before the festival season and will focus exclusively on the SUV segment.
India is the largest EV market in the world and several global players are looking to make their bet in the market. However, the government imposes high tariffs on foreign EV manufacturers to safeguard the market for the domestic EV manufacturers in the country.
Recently, is a roadblock for its India entry. “The current tariff structure with India is that any car which we send in is subject to a 70% tariff and a 30% luxury tax. So, the same car which we’re selling (in the US) is 100% more expensive in India,” Taneja added.
In response to this, (priced above $35,000) from 110% to 15%, but only for automakers meeting certain conditions like investing at least INR 4,150 Cr ($500 Mn) in India and setting up a local manufacturing facility within three years.
Besides, they must achieve revenue targets of INR 2,500 Cr by the second year, INR 5,000 Cr by the fourth year, and INR 7,500 Cr by the fifth year.
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