VinFast Opens EV Plant in India After Halting its US Expansion

Vietnamese electric vehicle company VinFast has launched an electric vehicle manufacturing facility in India, the second-largest economy in Asia, several months after it paused its plans to expand to the U.S., Canada, and Europe. 

The company initially planned to expand into several major Western markets but pulled the plug on its expansion plans because of high logistical costs that left it with nearly $10 billion in accumulated losses. The automaker is now focusing its efforts on Asia and opened its first electric vehicle production plant in India on Aug. 4. 

Located on a massive 400-acre lot in Sillanatham, Thoothukudi district, VinFast’s new Indian EV facility is capable of manufacturing 150,000 vehicles per year, VinFast says. In comparison, the company sold less than 100,000 EVs in 2024, and 90% of these deliveries occurred in Vietnam, its home market. 

VinFast started construction at the lot in February 2024, initially planning to begin operations at the facility on June 30th but holding back the launch amidst several delays. A month before that, the Vietnamese electric vehicle firm unveiled its premium SUVs, the VF6 and VF7, at the auto show in New Delhi and began taking preorders for the two electric cars in July. 

VinFast’s decision to pivot away from Western markets like the U.S., where it has paused operations on an $8 billion facility in North Carolina, came after its expansion efforts were impacted by a combination of major issues. 

For starters, the company rushed to debut the VF8 and VF9 before they were fully developed or had undergone rigorous tests to ensure they met standards in the West. Early reviews for the vehicles were overwhelmingly negative, with reviewers complaining about poor handling and ride quality, software glitches, poor build quality, and limited range. 

The two VinFast EVs were priced similarly to better-quality EVs from more established companies, which, combined with their overall low quality, resulted in extremely poor sales. VinFast scrambled to lower prices with drastic cuts, but it had already suffered significant damage and turned off numerous early adopters before it had even made a mark on the market. 

In the end, VinFast accumulated a whopping $11.5 billion in losses before it decided to pause its Western expansion efforts and turn to India. Its main focus will now be the markets in Asia as well as the Gulf, where demand may be unaffected by American reviews and driver expectations for their vehicles differ from the West. 

In addition to assembling 50,000 units of both the VF6 and VF7, Tamil Nadu Industries Minister T.R.B. Raja noted during the launch that the plant could create up to 3,500 direct employment opportunities. VinFast Asia CEO Pham Sanh Chau says the facility is a major step toward the company gaining a long-term foothold in India and will allow it to develop affordable, high-quality electric cars for the Indian market. 

The pause to VinFast’s expansion plans in the U.S. due to complaints about the quality of its vehicles shows that quality is a big issue, and that startups like Bollinger Innovations, Inc. (NASDAQ: BINI) whose EV models are gaining traction have paid attention to quality. 

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