EV firm VinFast to make India debut, will set up facility in Tamil Nadu: Report

VinFast, a Vietnamese electric vehicle (EV) manufacturer backed by the country's largest conglomerate, is making its entry into the Indian market. With plans to invest $2 billion in establishing an EV facility in Tamil Nadu, VinFast is positioning itself as a formidable competitor to Tesla and other established automakers, The Economic Times reported.

The company's strategy includes building a nationwide dealership network, aiming to offer affordable alternatives to Tesla's premium models and capitalizing on India's burgeoning demand for EVs.

Despite the challenges faced by the Indian EV industry, such as high costs, expensive batteries, inadequate charging infrastructure, and range anxiety, VinFast could leverage its status as one of the first EV-only companies to operate in the country. 

The Indian EV market, although currently small with EV sales constituting just 2.3% of total passenger vehicle sales in 2023, is projected to grow significantly. Analysts predict that India's EV market has the potential to reach over 40% penetration with $100 billion revenue by 2030.

VinFast's initial offerings may include two to three e-SUV models from its existing portfolio, starting with the compact SUV crossover VF e-34, followed by larger models like the VF e-36, VF6, and VF7. The company's approach to premiumisation could allow it to introduce high-end features at more competitive prices than Tesla and other luxury brands.

VinFast achieved a milestone by delivering 34,855 electric vehicles in 2023, bringing their total global deliveries to 42,291 since their inception in 2021.

As VinFast prepares for its groundbreaking ceremony in Thoothukudi on February 25, 2024, it faces a landscape where Tata Motors currently dominates the electric car market with an 80% share. 

However, the absence of Chinese manufacturers in India provides an opportunity for VinFast to make a significant impact. Moreover, the Indian consumer preference for hybrid vehicles over pure-play electric cars presents another challenge for EV makers, including VinFast, to navigate.

With its ambitious plans and early-mover advantage, the company has the potential to reshape the competitive landscape and accelerate the adoption of electric vehicles in one of the world's largest automobile markets.

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