VinFast Scouts Land For India’s EV Market Entry

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Vietnamese EV manufacturer VinFast Auto is assessing sites for a new facility and has examined two locations in Tamil Nadu.

Vietnamese EV manufacturer VinFast Auto is scouting potential sites in India for its upcoming manufacturing facility. The company has already inspected two locations in Tamil Nadu and is considering further evaluations in Gujarat. Sources suggest that VinFast’s interest in Tamil Nadu and Gujarat stems from their need for port access, with Tamil Nadu’s East-West connection being particularly advantageous.

VinFast has recognized India as a market with significant potential. The company plans to invest around USD 200 million to begin vehicle assembly by 2026. Previous reports from September indicated that both Tamil Nadu and Gujarat were being considered for the new facility. After its Nasdaq listing, VinFast temporarily became the world’s third most valuable carmaker in August. The company’s recent discussions with analysts revealed plans to start production in India and Indonesia by 2026. Each facility is expected to have a capacity of up to 50,000 cars annually in its first phase, with an estimated investment of USD 150-200 million.

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VinFast aims to capitalize on the growing EV market in both countries, where current EV adoption rates are low. The company plans to establish CKD (completely knocked down) facilities in these regions, which can offer various benefits, including government incentives and access to raw materials at competitive prices.

Founded in 2017, VinFast Auto is set to expand its dealership networks in new markets, including India, starting in 2024. The company, a subsidiary of Vietnam’s largest private corporation, Vingroup, is rapidly growing and has aspirations to challenge Tesla in the US. VinFast’s existing manufacturing facility is located in Hai Phong, Vietnam. In July, they began constructing their first US factory in North Carolina, expected to produce up to 150,000 vehicles annually in its initial phase.

Regarding their India plans, sources indicate that if VinFast chooses Gujarat, it might compromise its access to the East, making Tamil Nadu a more favourable option due to its better connectivity with East Asian markets. Tamil Nadu boasts three major ports: Chennai Port, Kamarajar Port, and V. O. Chidambaranar Port Authority. These ports play a crucial role in the state’s maritime activities, with Chennai Port Authority and Kamarajar Port Ltd exporting a combined total of 380,000 cars in FY23, a significant increase from the previous year. Major car manufacturers like Hyundai and Kia contributed significantly to these exports.

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