Vietnamese electric vehicle (EV) manufacturer VinFast has announced plans to establish an EV division in India and is exploring various options, including Gujarat and Tamil Nadu, as potential locations for its manufacturing operations in the country.
A spokesperson for VinFast stated, “India is the third largest car market in the world. While EV penetration is at 1 per cent, there is a huge potential in BEV (Battery Electric Vehicle) adoption here that VinFast is looking forward to participating,” reports Forbes India.
“We are planning to build a CKD factory in India,” the spokesperson added.
Under CKD, or completely knocked down route, a vehicle is assembled in a country, after parts and components are imported, with the route attracting the lowest import duty at 15 per cent.
The company believes that establishing such facilities within local markets can provide access to government incentives for domestic manufacturing, offer relief from specific tariffs and taxes, and enable access to raw materials at favourable rates.
Founded in 2017, VinFast Auto recently became the world’s third-largest automaker by market capitalisation, trailing only Tesla and Toyota, with a valuation of $191 billion.
The new manufacturing facility in India, expected to commence operations by 2026 — will have an initial production capacity of approximately 50,000 cars per year and an estimated total coverage of $150-200 million, reports Economic Times.
In recent years, the electric vehicle segment in India has gained significant momentum, with both homegrown and international automakers introducing their models to the market.
VinFast Auto’s announcement for India comes when Tesla is also evaluating opportunities in the market for a potential expansion.
Before VinFast, Tesla revealed its plans to establish a presence in India — including leasing office premises in Pune and engaging with high-ranking government officials and ministers, to systematically move forward with its plans to initiate operations in the country in the near future.