VinFast Accelerates Investment in India
VinFast’s rapid investment strategy aims to transform India into a pivotal manufacturing and export hub within its global supply chain.
On December 4th, VinFast and the Tamil Nadu government signed a Memorandum of Understanding (MoU) allocating an additional 200 hectares of land in the SIPCOT Industrial Park, Thoothukudi. The company is also scaling up its production capacity from 50,000 to 150,000 electric vehicles annually.
Signing ceremony between VinFast and the Tamil Nadu government.
VinFast plans to invest an additional $500 million (part of its $2 billion commitment) to build specialized workshops, supporting product diversification, including electric motorcycles and electric buses.
In terms of ecosystem and distribution, the company will launch the GSM (Green and Smart Mobility) electric ride-hailing service to establish a comprehensive green transportation ecosystem.
VinFast Limo Green exported to India.
Why is VinFast Going All-In on the Indian Market?
Firstly, the core reason lies in the scale of India’s automotive market. According to the Society of Indian Automobile Manufacturers (SIAM)’s October 2025 report, the market continues to grow robustly, indicating massive demand across segments:
Specifically, car sales in India reached 460,739 units in October 2025, up 17.2% year-on-year. Two-wheeler sales hit 2,210,727 units, a 2.1% increase from the previous year.
However, electric vehicle (EV) penetration remains low (under 5% of total sales), presenting vast growth potential.
The Times of India reports that electric two-wheelers (E2W) saw over 1.2 million registrations in the first 11 months of 2025, accounting for nearly 60% of India’s total EV sales. Passenger electric vehicles (cars & SUVs) reached 156,455 units by November 2025, a 57% jump from the previous year’s 99,429.
Secondly, competition in India’s EV segment is fierce. Alongside VinFast, major players like Tata Motors, Hyundai, BYD, and MG are investing billions in local EV production, offering consumers more choices across segments.
Expanding into electric motorcycles and buses is a strategic move by VinFast to target a broader consumer base and gain a competitive edge in this dynamic market.
Tamil Nadu Chief Minister M.K. Stalin signs the first electric vehicle produced at VinFast’s Tamil Nadu factory.
Thirdly, VinFast is receiving positive signals in India. The Economic Times’ October 2025 report highlights VinFast’s promising start, even outpacing Tesla’s initial progress. In October, VinFast ranked among the top 8 EV companies by sales.
While India’s EV market is dominated by domestic manufacturers like Tata Motors, VinFast is gaining momentum in the fast-growing EV segment.
Lastly, India’s government policies are a key driver. New Delhi imposes high tariffs on fully imported vehicles, making exports from Vietnam less competitive.
Localizing production allows VinFast to leverage land, tax, and financial incentives, ensuring competitive pricing in the domestic market. This aligns with India’s national goal of achieving 80% E2W market share by 2030 (NITI Aayog report).
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