Vietnam’s VinFast plans to set up a plant to assemble its cars in India, as it looks to tap into growing demand for electric vehicles (EV) in the world’s third-largest automobile market.
VinFast said Thursday it intends to set up a completely knocked down, or CKD, facility in India and Indonesia each to expand its overseas presence.
Each CKD facility in Indonesia and India has a planned total capacity of up to 50,000 cars per year and an estimated total capital expenditure of $150 million to $200 million in the first phase. It expects production to begin by 2026, VinFast said.
The company said it aims to access “the tremendous potential” for increased EV adoption in India and Indonesia where EV penetration is currently only 1%. The CKD facilities in these markets can provide access to government incentives for local manufacturing, relief from certain tariffs and taxes, and access to raw materials at attractive rates, it said.
VinFast also said it has optimized its capital expenditure plan for global manufacturing in 2024 and 2025, which is expected to save about $400 million, compared to earlier guidance. These savings are expected to be used towards building CKD factories in Indonesia and India, the company said.
The EV maker’s plan to set up an India facility come even as it has started hiring in the country. A LinkedIn ad showed last month it was looking to hire people for sales, legal, finance and back-office jobs at its office in Gurugram.
VinFast hasn’t yet revealed the possible location of its planned India facility. If it does enter India, it would compete with the likes of local automakers Tata Motors and Mahindra & Mahindra, which already sells EVs in the country.
The Indian government aims to increase the share of EVs to 30% for private cars by 2030.
VinFast, backed by Vietnam’s largest conglomerate Vingroup, reported a 159% year-on-year rise in third-quarter revenue to 8.25 trillion Vietnamese dong ($338 million). Its net loss widened to 15 trillion Vietnamese dong from 11.2 trillion Vietnamese dong. The company delivered 10,027 EVs in the July-September quarter, up from just 153 a year earlier.
