Vietnamese electric vehicle (EV) maker VinFast Auto Ltd. is in talks with India’s state-owned banks to secure a loan of up to $200 million. This loan is part of the company’s proposed $500 million investment in India, as it ramps up plans to establish itself in the country’s rapidly expanding EV market. The financing is expected to be denominated in Indian rupees or through the external commercial borrowing (ECB) route in foreign currency. Discussions are ongoing, but the final terms have not yet been agreed upon.
This marks VinFast’s first major financing push in India, indicating the company’s long-term commitment to investing in the local market. The loan will be used to support the establishment of VinFast’s EV manufacturing facility in Tamil Nadu, which is now scheduled to open on July 30. The facility will be crucial for local production and distribution of VinFast’s EVs in India.
VinFast’s expansion into India is part of its strategic pivot towards Asia, after making a deliberate geographical shift away from North America and Europe due to high logistics costs. The company is focusing on key Asian markets, including Vietnam, India, Indonesia, and the Philippines. VinFast’s founder and CEO, Pham Nhat Vuong, has committed close to $1 billion since 2023, and a further $2 billion through 2026, to support the company’s growth.
The company is also preparing to launch its debutante products in India, the VinFast VF6 and VF7, and will soon start taking reservations for these models. The smallest EV, the VF3, is set to be launched in 2026. VinFast’s global ambitions are largely bolstered by its cash reserves, with parent company Vingroup pledging loans of up to $1.4 billion to support growth.
Overall, VinFast’s entry into the Indian market is a significant development in the country’s EV sector, and the company’s commitment to investing in the local market is a positive sign for the industry’s growth. With its manufacturing facility set to open soon, VinFast is well-positioned to capitalize on India’s rapidly expanding EV market, and its strategic pivot towards Asia is likely to yield significant returns in the coming years.