VinFast to Launch Car Assembly Plant in India by June 2025

VinFast, the electric vehicle maker from Vietnam often likened to Tesla, is reshaping its worldwide strategy and focusing much of its energy back in Asia. After a bold push to enter the U.S. market, the company is now toning down its western ambitions and is realigning its expansion with much slower revenue growth than projected in the U.S. and with some big regulatory hurdles in the way. 

VinFast's founder and chairman, Pham Nhat Vuong, told shareholders of his parent company, Vingroup, that VinFast will shift its attention to operations in India, Indonesia, and the Philippines.

India Plant Set for June Launch

By the end of June 2025, the company plans to inaugurate a facility in India for special vehicle assembly. The plant will initially take on a very local mission, converting "knockdown" kits, basically, an automobile's guts and other essential components, into complete vehicles that meet India's right-hand-drive specifications. The company's assembly plant will have space and infrastructure for up to 150,000 assembled and finished vehicles to leave its doors each year. VinFast's ambition is to be the first Vietnamese automobile manufacturer to compete in the Indian market. This effort is being aided by the Tamil Nadu state government which has opened its doors for VinFast.

Challenges in the U.S. Prompt Shift

VinFast had invested heavily in its push into the U.S. market, but surging logistics costs and extended delays have forced a recalibration. Not only are U.S. tariffs on imports of electric vehicles a big unknown, but the company now knows it must find a way to close the gap between what it spends to deliver electric vehicles to North America and Europe and what its rivals spend. Remarkably, the company has decided to retreat, not permanently, the chief executive insists, but for the time being, because the figures just don't work.

Tesla Hesitant, VinFast Moves Ahead

Whereas VinFast speeds up its operations in India, Tesla proceeds with caution. The Elon Musk-led electric vehicle (EV) giant continues to see India as an attractive opportunity but finds that steep duties make the market less accessible. Tesla's chief financial officer, Vaibhav Taneja, recently underscored the point that the company continues to weigh the right time for an Indian debut. Till the time India doesn't revise its policy of taxing imported vehicles, a full push by Tesla can't be called certain.

Determined to establish itself in the emergent Asian car markets, VinFast is trying to gain a foothold there, even though it is not yet profitable. With operations in Indonesia on the verge of starting in October, the company looks to start dominating the regional markets while its American rival plays the waiting game for more favorable conditions.