VinFast bets on local manufacturing, retail network to tap India's EV market

Vietnamese electric vehicle maker VinFast is pushing into India with a two-pronged plan: set up local manufacturing and build a wide retail network. The company wants to grab a share of India's growing EV market, where sales are rising but still make up a small fraction of total car sales.

VinFast will build a factory in Tamil Nadu. The plant is expected to produce both electric cars and two-wheelers. It marks the company's first manufacturing base in South Asia. VinFast has not yet disclosed the exact investment figure or production capacity, but the move signals a long-term bet on India.

The company also plans to open a chain of showrooms and service centers across the country. VinFast will sell directly to customers through these company-owned outlets, rather than relying on traditional franchise dealers. That approach, already used by Tesla and other EV startups, gives the automaker more control over pricing and customer experience.

Why India matters

India is the world's third-largest auto market by sales. But EVs account for less than 2 percent of total car sales. The government wants to push that number to 30 percent by 2030. To get there, New Delhi offers tax breaks and subsidies for EV buyers and manufacturers.

VinFast faces stiff competition. Domestic players like Tata Motors and Mahindra & Mahindra already sell electric cars in India. Tata alone holds more than 70 percent of the country's EV car market. Chinese brands such as BYD and MG Motor are also expanding, though they face higher import duties and regulatory scrutiny.

VinFast's entry comes at a time when India is tightening rules on foreign automakers. The government recently raised import duties on fully assembled EVs to 100 percent. That makes local assembly or manufacturing almost a must for any serious player.

What VinFast brings

VinFast is a young company. It started making cars in 2019 and launched its first EVs in 2021. The company is backed by Vingroup, one of Vietnam's largest conglomerates. VinFast has already set up factories in Vietnam and the United States, and it plans to start production in Indonesia soon.

In India, VinFast will likely start with its VF series of electric SUVs. These include the VF e34, VF 8, and VF 9 models. The cars are priced competitively in other markets, though Indian prices are not yet known. The company will also sell electric scooters, which are more popular in India than electric cars.

VinFast says it will build a network of fast-charging stations at its showrooms and service centers. It also plans to partner with third-party charging operators to expand coverage. That could help ease range anxiety, a major hurdle for EV buyers in India.

The company has not announced a timeline for when its factory will start production or when its first cars will hit Indian roads. But analysts expect the first VinFast vehicles to arrive in India by late 2024 or early 2025.