VinFast likely to bring in electric SUVs to India after Centre's new EV policy

India's latest move signals a significant strategic change in its electric vehicle (EV) approach. The nation is set to decrease import duties on specific EVs from manufacturers pledging to invest at least $500 million and kick-start domestic production within three years. This development, part of a fresh e-vehicle policy, is designed to lure substantial investments from major global EV manufacturers.

This policy revision is expected to heighten competition for domestic automakers, especially with companies such as Tesla and VinFast eyeing India's position as the world's third-largest car market.

Vietnam's VinFast Auto, the Vietnamese EV maker, expressed enthusiasm for India's recent electric vehicle policy changes. The company stated that this development is expected to enable VinFast to introduce a diverse range of eco-friendly, high-quality SUVs at competitive prices.

VinFast India CEO Pham Sanh Chau praised the Indian government's new electric vehicle (EV) scheme, highlighting its goal of attracting significant investments in manufacturing, fostering skill development, establishing a robust supply chain, and offering consumers access to world-class, zero-emission vehicles. Chau emphasised that this policy allows VinFast to introduce a range of premium EV SUVs at inclusive prices, complemented by after-sales services.

VinFast has committed to investing $500 million in India, which includes establishing an electric vehicle manufacturing facility in Tamil Nadu. The company previously announced a plan to invest ₹4,000 crore over five years in the initial phase, creating 3,500 jobs in the Tuticorin region. Once operational, the plant will have the capacity to produce 1.50 lakh vehicles.

Earlier in February VinFast officially begun construction on its inaugural integrated EV manufacturing facility in Tamil Nadu, India which will spread across 400 acres within the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) industrial estate. VinFast also aims to stimulate local economic growth by promoting localization efforts.

Beyond manufacturing, VinFast intends to establish a nationwide dealership network to cultivate a strong brand presence and effectively engage with customers throughout the country. The company further filed a design trademark for its first vehicle. It is the VF3, a compact electric SUV that is a rival to the MG Comet EV. As of now, there is no confirmed launch date for the VF3.

The recently approved EV policy aims to promote India as a manufacturing destination for EVs and attract investment from renowned global EV manufacturers. Under this policy, companies establishing manufacturing facilities for EV passenger cars will be permitted to import a limited number of cars at lower customs/import duty of 15 per cent on vehicles costing $35,000 and above for five years from the approval date. This move is expected to attract major global players like US-based Tesla to invest in India's EV manufacturing sector.