VinFast considers manufacturing electric vehicles in India
A new report from ET Auto says that VinFast, the automotive division of Vietnamese conglomerate Vingroup, will locally assemble electric cars in India. Officially, the company has said it could initially import Completely Built Units (CBUs). The Indian government levies a steep tariff rate of 70% or 100% on CBUs, depending on the cost, insurance, and freight (CIF) value. The report says it plans to source Completely Knocked Down (CKD) kits and assemble them in the country. This alternative route slashes the tariff rate to 15%.
In addition to saving significantly on tariff rate and thus pricing the models much more competitively, VinFast will show its commitment to India and its local partners better by locally assembling cars. The company expects to start operations at its local plant three months before schedule.
Expensive pricing for initial EVs
The report says that VinFast will likely launch EVs with 300-500 km of range in the ₹2.5-3.0 million (approx. €28,000-33,000) range. Such pricing could make them very expensive for the average Indian, which typically shops in price segments below ₹2.0 million (approx. €22,000). According to local newspaper Business Standard, the average selling price of passenger vehicles in the country is just ₹1.15 million (approx. €13,000). Thus, VinFast may fully manufacture the later models in India instead of assembling them from imported CKD kits, and price them significantly lower.
VinFast is building a factory almost at the tip of India in Thoothukudi (Tamil Nadu), which will give it easy access to the V. O. Chidambaranar Port. The company says that the Indian plant will have an annual capacity of up to 150,000 units and will serve South Asian, Middle Eastern and African export markets in addition to domestic demand. The report says that the company will launch its first locally assembled car during the festive season of 2025, which will fall in the final months of the year.
In Vietnam, VinFast has a wide line-up of seven EVs, all SUVs, starting from the tiny VF 3 and going up to the full-size VF 9. The company began operations in 2017 and manufactures cars on an 828-acre (3,350,000 m2) local manufacturing facility on Cat Hai Island near Hai Phong.
VinFast not ruling out CBU imports for future models
In April, the Indian government announced a policy that reduces the customs duty on CBU EVs with a CIF value of $35,000 (approx. €32,500) or higher down to 15% for five years, limited to 8,000 units annually. Only companies that plan to invest at least ₹41.50 billion (€458 million) in making EVs in India within three years can avail of this scheme. The report suggests VinFast may meet these requirements but is considering taking advantage of it eventually.
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