Vietnam's EV startup VinFast plans India launch, announces big investment

Vietnam-based EV startup VinFast could beat Tesla to launch in India as new entrant in the electric vehicle segment. The EV maker, which recently became the world's third most valuable carmaker, has announced big plans for India with an investment worth ₹1,665 crore. The electric vehicle manufacturer has said that it plans to set up its own manufacturing facility in India as well as Indonesia. It said production of its electric vehicles in these two countries should start within the next three years.

VinFast was founded by Pham Nhat Vuong, the richest person from Vietnam who also founded its parent company Vingroup. VinFast isn't a profitable EV maker yet, though the EV startup made a splash at Wall Street debut with market value soared to $85 billion at a time. It became more valuable than both Ford and General Motors put together. However, since the valuation highs, VinFast's worth has come down.

VinFast has not given out too many details about its India plans and the electric vehicles it aims to bring to the country. There is still no clarity where the company plans to set up its assembling facility in India when it officially makes an entry. Issuing a statement, VinFast said, “Indonesia and India has a planned total capacity of up to 50,000 cars per year and an estimated total capital expenditure of USD 150-200 million in phase 1. Production is expected to commence by 2026." The company also said, “VinFast facilities in these local markets can provide access to government incentives for local manufacturing, relief from certain tariffs and taxes and access to raw materials at attractive rates."

VinFast's India outreach isn't new. The EV startup had earlier begun recruiting resources. The company had shared a notice on LinkedIn which read, “Dare to think, dare to do, and dare to face difficulties." The EV startup had announced that it is looking out for resources in sales, legal and back office jobs in India with its office located in Gurugram, Haryana.

VinFast considers itself as a rival to Tesla, world's largest electric vehicle manufacturer. VinFast's India plans are revealed at a time when Tesla is at its closest to officially launch in the country after years of deliberation. In a statement issued by the Vietnam-based EV maker, it is aiming to access the tremendous potential for increased EV adoption in India and Indonesia where EV penetration is currently only 1 per cent.

In global markets, VinFast offers electric vehicles such as VF6, VF7, and VF8, which are five-seaters, along with seven-seater VF9.

India currently has electric vehicles contributing barely two per cent of overall auto sales. The Centre is aiming to increase the share to at least 30 per cent by the end of this decade. With the EV segment in India still at a nascent stage, VinFast's entry will give it an opportunity to be a first-mover among the foreign EV makers aiming the Indian auto market.