After Tesla, Vietnamese electric car maker VinFast has announced plans to set up an electric vehicle (EV) unit in India.
In its Q3 2023 earnings release, VinFast said it would invest $150 Mn- $200 Mn in India to set up a completely knocked down (CKD) assembly unit.
The EV maker said the new facility will start operations by 2026 and will be capable of making approximately 50,000 cars per year in the first phase.
The automaker said that it aims to leverage the EV market opportunity in India, which is growing fast but has seen only 1% penetration.
“We aim for our vehicles to be present in up to 50 global markets and countries by the end of 2024,” it said in the statement.
The establishment of VinFast facilities in these markets can provide access to government incentives for local manufacturing, relief from certain tariffs and taxes and access to raw materials at attractive rates, the company said.
It must be noted that the Indian government has launched a production linked incentive scheme of over INR 25,000 Cr to boost domestic production of automobiles and related components, including electric vehicles.
Commenting on the company’s plans for India, VinFast chief financial officer David Mansfield said, “VinFast is on track to meet its deliveries guidance and is well-positioned to expand in strategic markets such as Indonesia and India.”
Like India, the company also plans to set up an EV unit in Indonesia.
India, the most populous country in the world, has emerged as an attractive market for global brands across sectors, including EV makers, over the last few years. While EV adoption has picked up pace in the country, it is largely led by two-wheelers. This provides an opportunity for global electric car makers to grab a big share in the Indian market.
Currently, the likes of Tata, Mahindra and Hyundai sell electric cars in India. Ola Electric also has plans to manufacture electric cars in the country.
Prior to VinFast, Elon Musk-led Tesla announced plans to enter India. From renting office space in Pune to meeting the top government officials and ministers, Tesla is gradually taking necessary steps to launch the business in the country soon.
In August, Tesla officials reportedly met union minister Piyush Goyal to discuss the acceleration of its plans to establish a manufacturing plant in the country. In addition to opening up an all new facility, the company is also planning to source EV components worth $1.7 Bn to $1.9 Bn this year from local vendors.
The US-based EV giant also plans to set up a battery storage facility in India.
In addition to Tesla, Audi and Mercedes-Benz are also in the queue to grab the opportunities in the Indian EV ecosystem.
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