VinFast looks to start India EV operations

Vietnamese electric vehicle (EV) maker VinFast is moving fast to kick-start its India operations, targeting sales of its first two-wheelers and four-wheelers in India beginning in the third quarter or second half of calendar year 2024, two persons aware of the plans told Mint on condition of anonymity.

The company has held dealer ‘clinics’ with 30-35 potential Indian dealer partners in Vietnam, and is soon going to announce its distributor network, which will display both two- and four-wheelers. The company will import these vehicles as completely-built up units (CBUs).

VinFast, which offers battery electric sport utility vehicles (SUVs) spanning the A to E segments (entry-level, compact SUV to ultra-luxury SUV) in Vietnam, will likely eye a price point in the vicinity of ₹18-20 lakh for its first import into India, one of the persons mentioned above said, adding, however, that import duty structures on fully built-up cars in India could tip that pricing higher. Imported vehicles priced below $40,000 face an import duty of 70%, while vehicles above that price point face an import tax of 100%.

While VinFast operates a mix of self-operated experience centres, direct sales and showrooms, and dealer-run showrooms in Vietnam and the US, it is looking to approach the Indian market in a phased manner, appointing dealers in large tier-1 cities first, and then branching out to towns and cities in the interiors.

VinFast is also actively establishing its leadership team in India, and is hiring in large numbers to support its operations out of Gurugram in the National Capital Region.

India is one of the seven international market clusters in Asia, Africa, Latin America and European countries apart from the three countries it is currently present in that VinFast is looking to enter, expanding its global footprint in regions it expects “high demand for EVs”, the company said in a US Securities and Exchange Commission filing.

VinFast will invest $500 million in Tamil Nadu over the next five years to establish an integrated EV manufacturing facility in India, with the greenfield factory to become operational in 2026.

VinFast officially listed on the Nasdaq Global Select Market on 15 August, following a successful merger with Black Spade Acquisition Co. Its market capitalization, after crossing a monumental $230 billion just days after its listing, fluctuated significantly after a steep fall and it now just under $15.4 billion.

Initially, VinFast’s entry into the US market was met with excitement as the company’s aggressive pricing, futuristic styling and focus on EVs appealed to a segment of consumers, even as rival Chinese EV players encounter an increasingly tough market in the country. VinFast has recently announced it has no plans to build another factory in the US (apart from its factory in North Carolina), as it turns to establishing local manufacturing operations in India and Indonesia, which are large, populous markets.

Early deliveries of VinFast’s VF8 SUV in the US were hampered by issues like software bugs and inconsistent build quality, damaging consumer confidence, but the company is doubling down with strong warranties and product fixes to compete in a highly competitive with established players like Tesla.