VinFast's India Plant to Open Ahead of Schedule Time as Asian Expansion Continues

Expansion Continues

VinFast Auto Ltd., a Vietnamese electric vehicle manufacturer, is ramping up its expansion throughout Asia, and its founder, Pham Nhat Vuong, is hopeful despite the slowdown in demand for EVs worldwide and the difficulties of breaking into the US market. In an interview at the parent firm Vingroup JSC's Hanoi headquarters, Vuong unveiled that VinFast is planning to open its India facility in the first half of the next year, six months ahead of schedule, and will start building an Indonesia plant within the next two months.

These aspirational expansion goals coincide with VINFAST 's navigating of the competitive EV market. VinFast sold 34,855 cars in 2023, most of which were sold to related parties. Shares have since fallen more than 90% from their peak following the stock's spectacular launch on the US market in August, during which it surged over 700% in just two weeks. Vuong, however, dismissed concerns about the slowing global demand for EVs that have impacted established rivals such as Tesla Inc. and Volkswagen AG.

"I’m not worried about electric vehicle sales," he said. "The growth of electric vehicles will be inevitable," He concluded. Notably, in January, VinFast signed an agreement with the Indian state of Tamil Nadu to invest up to USD 2 billion in the country, aiming to penetrate one of the world’s largest auto markets. Work on the plant began in February with an initial investment of USD 500 million.

Moreover, production at the Indonesia site is expected to commence by the end of 2025, earlier than the original 2026 schedule. Both factories will initially have a production capacity of 50,000 vehicles, with the potential to increase to 3,00,000 annually based on market demand, Vuong noted.

However, despite challenges, VinFast remains committed to becoming a profitable global brand. Chinese competitors are increasing exports of cheaper EVs, and Tesla has reduced prices amid declining interest in electric vehicles.

VinFast is also on track to start car production at its North Carolina factory, with construction having begun in July last year. The plant, which is expected to have an initial capacity of 150,000 vehicles annually, is set to start production in 2025. The company is considering whether to delay the factory’s opening due to high interest rates but has no plans to reduce its production capacity or scale down its footprint.

Also, VinFast is in discussions with financial investors and is open to partnering with an industry player that can aid its growth. Nevertheless, Vuong emphasized that the company would not accept high-interest financing or raise funds indiscriminately.