New EV policy to aid premium-quality SUV launches in India, says VinFast India CEO | Autocar Professional


Lauding India’s new policy that promotes electric car manufacturing and cuts import duty on certain cars, Vietnamese automaker VinFast Auto’s India Chief Executive Officer Pham Sanh Chau said the policy will help the company to introduce premium-quality sports utility vehicles at inclusive prices.

The Indian government on Friday unveiled the much-anticipated electric vehicle policy that drastically reduces the import duty on certain electric cars to 15% from the current 70-100% for five years, provided the automaker invests at least Rs 4,150 crore, or US$500 million, to make in India within three years.

“This forward-looking policy helps us introduce a wide variety of smart, green, premium-quality SUVs, at the inclusive prices, along with outstanding aftersales policies,” Chau said in a statement today. VinFast has started the construction of its first integrated electric vehicle manufacturing facility in the country at Thoothukudi, Tamil Nadu.

The electric car maker plans to invest a total of up to US$2 billion in Tamil Nadu, with US$500 million lined up in the first phase of the facility over a period of five years for a production capacity to produce 150,000 vehicles annually. “With a long-term growth commitment in India, we have pledged an expenditure of $500 million, which includes the electric vehicle manufacturing facility in Tamil Nadu,” Chau noted.

VinFast is looking at India, which is the world’s third-largest passenger vehicle market globally, as an important market for its global expansion plans. The Nasdaq company’s popular electric car models include VF e34, VF 8, VF 5, VF 9, and it has a presence in the US, Canada, Germany, France, and the Netherlands, apart from its home market Vietnam. 

India’s import duty on fully-built cars was in the range of 70-100%, depending on the value of the models. This higher import tax has been one of the major reasons that restricted some global car makers such as Tesla from launching in India. Like Tesla, VinFast has also been pushing for a tax concession on the import of electric cars to India.

However, the new policy could facilitate the entry of global car makers such as Tesla and incentivise India plans of companies like VinFast, Jaguar Land Rover and Foxconn.

“We highly value the Indian Government’s new EV scheme as it aims to drive large investments in manufacturing, create competencies and upskilling, set up a robust supply chain and offer consumers world-class, zero tailpipe emission vehicles,” Chau said.

The government will allow automakers to import a maximum of 40,000 electric vehicles, at a rate of 8,000 cars per year, at a 15 percent duty. The companies will be eligible for this lower duty if they commit to setting up manufacturing facilities in India with a minimum investment of Rs 4,150 crore and start commercial production within three years. The automakers will also have to achieve a 30 percent domestic value addition within three years and further increase it to 50 percent by the fifth year.

VinFast is likely to commence production at its Tamil Nadu facility by 2026. The plan is not only to cater to the domestic market but also to use India as a base for exports. The automaker could be looking at importing completely built units before launching localised products.

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