The company’s new factory in Tamil Nadu is expected to start operations by March 2025, three months earlier than planned.According to an ET report, the first locally assembled car from VinFast is anticipated to be launched during the 2025 festive season, with prices ranging from Rs 25-30 lakh, positioning them in the premium affordable segment of India’s rapidly growing EV market. The models are expected to offer a driving range of 300-500 kilometers.
By opting for the completely knocked down (CKD) route, VinFast can avoid high import duties and offer its products at competitive prices in the Indian market. India imposes a 100% import duty on car models with a CIF value exceeding $40,000 and a 70% duty on models with a CIF value below $40,000. In contrast, CKD kits are subject to a 15% duty.
VinFast India Plans
VinFast anticipates that local assembly and competitive pricing will enable it to reach a peak capacity of 50,000 units in its first year of operations. The company expects India’s nascent electric car market to conclude the current calendar year with 150,000 units, an increase from 90,000 units in 2023. VinFast is expected to reveal its plans for India at the Bharat Mobility Global Expo, which is scheduled to take place between January 17 and 22, 2025.
The source was quoted as saying, “The local assembly of models gives greater confidence to suppliers, dealers, and the buyers. The company will rather use what it saves on duties in brand building and marketing. As the plant is expected to be ready in the first quarter of next calendar year, it makes sense to take the CKD instead of CBU (completely built unit) route.”
Although VinFast’s Indian venture does not depend on the Indian government’s new EV policy announced on March 15, the company eagerly awaits the policy guidelines to determine whether to take advantage of the incentives, according to the person mentioned earlier. The first meeting between EV companies and government officials to discuss the new EV policy occurred on April 19, with a VinFast official present among other industry executives.
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The EV policy provides import duty concessions to automakers establishing manufacturing units in the country with a minimum investment of $500 million.
The EV policy provides import duty concessions to companies establishing manufacturing units in India. The policy requires a minimum investment of $500 million and allows the import of up to 8,000 cars per year at a reduced import duty of 15% for models priced at least $35,000. This concession is valid for five years from the date of the government’s approval letter.
In line with this policy, VinFast has announced its intention to invest over Rs 4,150 crore ($500 million) in the next 5 years to construct a manufacturing facility near Chennai, in Thoothukudi.
The factory, spread across 400 acres, will have an annual production capacity of 150,000 units. During the first phase of operations, the company expects to employ between 3,000 and 3,500 workers, as outlined in its memorandum of understanding with the Tamil Nadu government.
