KEY HIGHLIGHTS
- VinFast faces India's new EV import policy
- Policy slashes import duties to 15%
- VinFast's prior investment may not qualify
- High-end VinFast models face higher prices
- Competitors align with policy for tax benefits
Vietnamese electric vehicle upstart, VinFast, has been making waves globally, and India is next on its radar. However, as the company prepares for its official market debut with the VF6 and VF7 electric SUVs, a roadblock has emerged in the form of Indias freshly introduced EV import policy - one that may limit VinFast's early-stage competitiveness in the premium EV space. Check out more details below and make sure you join our 91Wheels WhatsApp Community to stay updated on the latest automotive news.
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India's New EV Import Framework
The Indian government's revamped EV policy is clearly designed to lure global automakers to invest big in local manufacturing. To encourage long-term commitment and domestic job creation, the policy offers a sharp reduction in import duties - slashing them from over 100% to 15% - but only for companies willing to make India a key part of their global production roadmap.
The eligibility criteria are clear:
- A minimum investment of USD 500 million (approx. Rs. 4,150 crore)
- Setting up a local manufacturing facility within three years
- Registration under the scheme before any benefits kick in
In return, companies can bring in up to 8,000 high-end EVs per year (priced above USD 35,000 CIF) at the discounted duty rate, for a period of five years or until their duty savings reach a fixed cap.
VinFast's Investment - Just Not Timed Right
Here's the catch for VinFast: while the company has already committed to setting up a full-scale EV production unit in Tamil Nadu and has announced a Rs. 4,000 crore investment, this was done before the policy was formalized.
Since the framework mandates that investments must follow official registration under the policy, early movers like VinFast could be sidelined from import tax relief - unless they re-register and re-invest the minimum threshold again under the new guidelines.
That places the brand in a peculiar spot. Despite meeting the investment amount and manufacturing goals, its current investment may not qualify for the incentives designed to lower the cost of importing models like the VF8 and other flagship EVs.
VinFast: Other Automakers Show Interest
As VinFast navigates this policy gap, several global carmakers - including Skoda, Hyundai, Kia, and Mercedes-Benz - are reportedly in the process of evaluating or registering under the new scheme. These brands stand to benefit early if they align their investment timelines with the policy's requirements.
What This Means for VinFast Customers
VinFast's initial models, including the VF6 and VF7, are expected to be locally assembled or manufactured in India, which may keep their prices relatively competitive. However, for its high-end models - which would be imported as CBUs - the absence of tax incentives could mean significantly higher price tags compared to competitors who are able to import at the reduced 15% rate.
In a cost-sensitive market like India, this price differential could influence early adoption, especially in the premium EV segment.
VinFast: A Strategic Crossroad
For VinFast, this development brings a strategic choice to the forefront: double down on its India investment to realign with the policy, or focus on local production to bypass the need for imports altogether. Given the company's ambitions and its rapid expansion globally, a recalibrated move cannot be ruled out.
Meanwhile, the Indian EV landscape is evolving at a breakneck pace, and brands that move fast and smart may shape the future of electric mobility in the country.
Read more: Nissan Magnite Crosses 2 Lakh Sales Milestone: What Makes it Popular?
Verdict
VinFast's early investment in India positions it as a serious player, but its timing might cost it key tax benefits under the new EV import policy. Whether the company adjusts its strategy or sticks to its existing game plan will be one to watch as it gears up for launch.
