VinFast Kicks Off India Production, Eyes Local Sourcing From Component Makers

Vietnamese electric vehicle (EV) manufacturer VinFast is in talks with multiple component makers to boost local sourcing from India.

VinFast’s Asia CEO, Pham Sanh Chau, told Reuters that the company is negotiating with several existing suppliers, with some considering shifting part of their production to VinFast’s new industrial park in Tamil Nadu. 

“The firm is in discussions with several of its current component suppliers, and some want to shift part of their production to the industrial park in India,” Chau said.

Last month, the company also partnered with lithium-ion (Li-ion) battery recycling startup BatX Energies, for battery recycling and critical mineral recovery in India. 

The CEO’s statement coincides with VinFast inaugurating its first manufacturing facility in India at Thoothukudi in Tamil Nadu.

Last year, the company and the Tamil Nadu government announced plans for up to $2 Bn in investment, starting with $500 Mn over the first five years. The plant will initially produce 50,000 vehicles annually, scaling up to 150,000 units once fully operational.

Besides this, the company has also lined up big India plans. It plans to launch its EV SUVs, including the VF6 and VF7, in Indian showrooms later this month (August 2025). While pricing and exact launch dates remain undisclosed, pre-bookings for these models opened in July.

The company has already opened its first dealership in Surat, Gujarat, and aims to establish 35 dealerships across 27+ cities by the end of 2025. In addition to retail expansion, VinFast is also entering the charging infrastructure segment through its subsidiary VinGreen. 

Vinfast has also set an ambitious target of annually producing up to 1.5 Lakh EVs in India in the coming years and exporting them to countries in the Middle East and Africa.

Global Carmakers Betting Big On India

The push comes as global automakers increasingly diversify supply chains by moving production to India amid rising geopolitical tensions, trade restrictions and cost pressures in China. 

Along these lines, Elon Musk’s Tesla is also eyeing to launch its first supercharging station in India this week, starting with Mumbai. Both Kia Motors and MG Motor ventured into the Indian automotive market in 2019. 

Before that, in late 1990s and 2000s, the likes of French company Renault, Japanese company Nissan and Toyota, German majors like Audi, Volkswagen and Porche, and South Korean company Hyundai also made their entry into the indian markets. 

This renewed push is driven by India’s emergence as the world’s third-largest car market by unit sales. As per Moody’s Ratings projections, the car sales in India were 4.2 Mn in 2024 and are projected to grow at a CAGR of 3.5% to reach around 5.1 Mn units by 2030, outpacing several mature markets. 

Moreover, car penetration remains low at around 44 vehicles per 1,000 people and a young, aspirational population, along with rising middle-class income, is fueling further demand.

On the policy front, initiatives such as “Make in India,” reduced corporate tax rates, the Auto PLI scheme, PM E-Drive scheme, including the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), are drawing significant investments.