Thursday, May 23, 2024

VinFast’s India Venture: Seeking Import Duty Reduction and Fostering EV Growth with New Tamil Nadu Plant

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Vietnam’s VinFast Seeks India EV Import Duty Cut as Plant Construction Starts

In a significant development for the electric vehicle (EV) market in India, VinFast, the Vietnamese electric vehicle maker, has initiated the construction of a manufacturing plant in the southern state of Tamil Nadu. With an ambitious vision, VinFast aims to start the production of its electric vehicles by the middle of next year, focusing initially on domestic sales before expanding to exports.

During a groundbreaking ceremony in Thoothukudi district, VinFast and the Tamil Nadu government disclosed last month their intentions toward a substantial investment plan. They aim for an investment of up to $2 billion, with a $500 million commitment for the first five years of the project. This venture is seen as a significant step towards enhancing the EV ecosystem within the region.

However, VinFast is also navigating through India’s current regulatory landscape concerning imports. Echoing a request similar to Tesla’s, VinFast has proposed a temporary reduction in India’s import duty on fully-built EVs, which currently stands at 100%. This request, aimed at making their vehicles more accessible to the Indian market for about two years, is under consideration by the Indian government. The proposed reduction to 70% to 80% on import duty for a limited number of cars would allow Indian customers to familiarize themselves with VinFast’s offerings, according to Pham Sanh Chau, VinFast’s India CEO.

While the Indian government has not yet reached a decision on the import duty reduction, the initiative reflects VinFast’s proactive approach to integrating into the Indian market. The country’s electric vehicle sales last year made up about 2% of the total car sales, but with the government targeting a 30% share by 2030, India is actively working to attract EV manufacturers.

The Tamil Nadu facility is expected to have an annual production capacity of up to 150,000 vehicles, supplementing the production from its main plant in Vietnam, which boasts a capacity of 250,000 vehicles. Pham Sanh Chou highlighted the company’s efforts in establishing a solid dealership network in India, with around 55 Indian dealers already in close collaboration with VinFast. There are also considerations to later introduce their two-wheeler models in the Indian market.

VinFast’s proactive approach and strategic investments underscore the company’s dedication to not only establishing a strong foothold in India but also contributing to the country’s evolving electric mobility landscape. As negotiations continue and construction progresses, the anticipation for VinFast’s electric vehicles grows among Indian consumers, signaling a promising future for electric mobility in the region.

Alex Sterling
Alex Sterlinghttps://www.businessorbital.com/
Alex Sterling is a seasoned journalist with over a decade of experience covering the dynamic world of business and finance. With a keen eye for detail and a passion for uncovering the stories behind the headlines, Alex has become a respected voice in the industry. Before joining our business blog, Alex reported for major financial news outlets, where they developed a reputation for insightful analysis and compelling storytelling. Alex's work is driven by a commitment to provide readers with the information they need to make informed decisions. Whether it's breaking down complex economic trends or highlighting emerging business opportunities, Alex's writing is accessible, informative, and always engaging.

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