VinFast of Vietnam Pursues EV Import Duty Reduction Amid Commencement of Plant Construction in India
VinFast’s Production Plans: Factory Construction Underway in Tamil Nadu, India
VinFast, the Vietnamese electric vehicle manufacturer, is making strategic moves in India’s burgeoning automotive market, seeking to establish a strong foothold through both import and local manufacturing initiatives. With plans underway to construct a manufacturing facility in the southern state of Tamil Nadu, VinFast aims to commence production by the middle of next year.
This initiative underscores the company’s commitment to catering to the rapidly growing demand for electric vehicles in India, initially targeting the domestic market before expanding its footprint through exports.
In anticipation of the completion of its local manufacturing plant, VinFast has approached Indian authorities with a request to reduce import duties on its cars for a period of approximately two years. This strategic move aims to familiarize Indian consumers with VinFast’s products while facilitating a smoother transition to locally manufactured vehicles once production commences. By leveraging this interim period to build brand recognition and consumer trust, VinFast aims to position itself as a formidable player in India’s electric vehicle landscape.
The collaboration between VinFast and Tamil Nadu, marked by an intended investment of up to $2 billion, represents a significant milestone in the company’s expansion efforts. With a committed investment of $500 million for the initial five years of the project, VinFast demonstrates its long-term commitment to establishing a robust manufacturing presence in India. This partnership not only underscores VinFast’s confidence in the potential of the Indian market but also highlights Tamil Nadu’s appeal as a conducive investment destination, offering strategic advantages and infrastructure support for automotive ventures.
Like Tesla, VinFast has also asked for a reduction to India’s 100 percent import duty on fully-built EVs, which has been opposed by domestic automakers. India, the world’s third-largest vehicle market, has been considering the requests but has not made a decision, a government official said last month.
Electric models accounted for just about 2 percent of India’s car sales last year, but the federal government is targeting 30 percent by 2030 and is working on a programme to attract EV makers.The Tamil Nadu project would have a capacity of up to 150,000 vehicles annually, compared with 250,000 at its main plant in Vietnam, according to VinFast.Pham Sanh Chau, a former Vietnam ambassador to India, said the company is already closely working with some 55 Indian dealers to have a sales network and could also look to later sell its two-wheeler models in the country
