VinFast Enters India’s EV Market

VinFast Enters India’s EV Market

Why in News VinFast Enters India’s EV Market? 

Vietnam’s Electric Vehicle company ‘VinFast’ has stepped into the Indian automobile market by launching its debut showroom in Surat, Gujarat. VinFast aims to expand its global reach as India becomes a key focus in its EV strategy.

VinFast’s First Showroom Launch in Gujarat: Keyword Highlights

• VinFast, the popular electric vehicle company from Vietnam, marked its formal entry into the Indian automotive market in July 2025. 
• The brand inaugurated its first-ever showroom in the vibrant city of Surat, Gujarat. 
• The newly opened facility is situated in the Piplod locality and covers an area of around 3,000 square feet.
• It is operated by Chandan Car, a recognized name in the Indian automobile retail industry. 
• The newly opened Surat showroom will display two of VinFast’s upcoming electric SUV models – the VF 6 and the VF 7. 
• The VF 6 is a compact family-friendly SUV, while the VF 7 offers a premium mid-size experience with advanced features like a panoramic sunroof and a large touchscreen system. 
• India will become the first country to receive the right-hand drive versions of both models, which shows the company’s localized approach.
• VinFast began accepting bookings for the VF 6 and VF 7 models on July 15, 2025. Customers can reserve their vehicle by paying a fully refundable booking amount of ₹21,000.
• The VF 6 is likely to cost between ₹18 lakh and ₹24 lakh, while the VF 7 may be priced between ₹30 lakh and ₹35 lakh. 
• The company plans to open 35 dealerships across more than 27 cities by the end of December 2025. 
• To support local production and reduce costs, VinFast is establishing a vehicle assembly plant in Thoothukudi, Tamil Nadu. This facility is expected to become operational in early 2026.
• To strengthen its national presence, the firm has partnered with RoadGrid, myTVS, and Global Assure for developing a widespread charging and service infrastructure.

Current Status of India’s EV Market

• India’s EV market shows fast growth in 2025. EV sales crossed 1.96 million units in FY2024‑25. This figure marks a 17 % increase from the previous year.
• EV sales reached over 2 million units in CY2024 with 25 % year‑on‑year growth and EVs made up about 7.7 % of total vehicle sales in 2024.
• Sales of passenger EV cars hit 99,004 units in 2024. That reflected a 20 % rise over 2023 numbers. 
• In May 2025 EV car sales rose strongly to 12,197 units. That month EV share reached 4.1 % of all passenger car sales, up from 2.6 % in May 2024.
• Electric two‑wheelers remain the largest EV segment. They accounted for about 59.4 % of EV sales in FY2025, or 1,209,772 units.
• Electric three‑wheelers made up 23 % of the market in that year, though that share dipped from earlier levels.
• Sales of passenger and cargo electric three‑wheelers rose about 11 % year‑on‑year in FY2025.
• India’s government set a goal for EVs to make up 30 % of all vehicle sales by FY2030. The plan includes subsidies, better funding, and stronger charging infrastructure.
• Charging infrastructure is rising steadily. As of FY2024 India installed over 49,000 public charge points. This total includes both slow and fast chargers.
• Uttar Pradesh is among the leading states in EV registrations. UP crossed 400,000 registered EVs by mid‑2025. The state plans to install over 300 new charging stations across its cities.
• The government supports EV policy via schemes like PLI. It has invested over ₹26,000 crore in electric and hydrogen vehicle production, alongside an additional ₹18,000 crore for next‑generation battery technology.
• India achieved 6.2 million cumulative EV registrations by FY2025, which marks an 11.5‑fold growth since FY2020.
• Analysts expect the EV industry value to cross USD 23 billion in 2024 and grow to USD 118 billion by 2032, at a CAGR of 22.4 %.

Government Initiatives to Promote EV Adoption in India

• FAME‑India Scheme (Phase II): The Faster Adoption and Manufacturing of Electric Vehicles Phase‑II started in April 2019 and runs for five years. The scheme had budget support of ₹10,000 crore. It provides demand incentives directly to buyers of electric two‑wheelers e‑3 wheelers e‑4 wheelers and e‑buses. The scheme aimed to support 7,090 electric buses, 5 lakh e‑3Ws, 55,000 e‑4W passenger cars and 10 lakh e‑2Ws. 

• PM E‑DRIVE Scheme: The PM Electric Drive Revolution in Innovative Vehicle Enhancement scheme began in September 2024. It runs until March 2026 with an outlay of about ₹10,900 crore. It replaced earlier EMPS and earlier short schemes. It issues upfront incentives for e‑two‑wheelers e‑three‑wheelers e‑buses e‑medical vehicles and e‑trucks. It funds charging infrastructure and upgrade of testing agencies. 

• PLI Scheme for Automotive Sector (EV and Hydrogen): The Production Linked Incentive scheme began in September 2021 and covers five years. It has budget of about ₹25,938 crore. The scheme targets production of advanced automotive products including electric vehicles. It offers incentives based on sales value linked to domestic value addition.

• SMEC Scheme: Scheme to Promote Manufacturing of Electric Cars started in 2024 to support manufacturing of electric passenger cars. It requires companies to invest minimum ₹4,150 crore in India. It also mandates minimum domestic value addition of 25 % by year 3 and 50 % by year 5. It offers reduced import duty of 15 % on EVs priced above certain thresholds.

• Electric Mobility Promotion Scheme: This scheme ran from April to September 2024. It had budget of ₹500 crore later extended to ₹778 crore. It offered subsidies for advanced battery equipped e‑two‑wheelers and e‑three‑wheelers. It has set a target of deploying more than 5.6 lakh electric vehicles, which also includes L5‑category e‑rickshaws and e‑carts.

• PM e‑Bus Sewa: This scheme launched in October 2024 with ₹3,435 crore support. It supports intracity and intercity deployment of over 38,000 electric buses. It assures payment security for bus operators in case of delays by public transport authorities.

• Tax and GST Benefits: The government reduced GST on electric vehicles from 12 % to 5 %. It also cut GST on EV chargers from 18 % to 5 %. It allows interest deduction up to ₹1.5 lakh for EV loans under section 80EEB. 

Way Forward for India’s EV Ecosystem

• • Standardize Charging Network: India needs many more public charging stations to reduce range anxiety. Industry analysts believe India will require upwards of 1.32 million public charging stations by 2030 to achieve a 1:40 ratio of EVs to chargers. The government should ramp up funding and policy support to install chargers in tier‑2 and tier‑3 cities. It should enforce uniform standards for connectors and interoperability across brands. 

• Reduce Cost via Battery Localisation: High upfront cost of EVs remains a key barrier. India imports around 70 % of its lithium‑ion cells. That fuels high price for consumers and limited product affordability. The government must strengthen the Production Linked Incentive (PLI) schemes for batteries and EV manufacturing. It should set clear localisation targets and support R&D into alternative chemistries.
• Improve Environmental Safety: EV battery waste lacks proper management today. Government reports point out a lack of robust recycling infrastructure and weak legal enforcement for battery disposal. The administration should introduce stringent battery waste rules with clear extended producer responsibility norms. It should support licensed recycling facilities through grants or tax incentives. 
• Create Unified Institutional Framework: EV ecosystem spans multiple ministries (transport power environment industry). India lacks a single coordinating body for EV policy. The government should set up a dedicated National EV Authority or task force. That body should oversee policy alignment standardisation data security. It should engage state governments to deliver consistent EV policy and implement zero‑emission vehicle mandates tied to automakers’ sales.