In a significant strategic pivot, Vietnam's largest conglomerate, Vingroup, is channeling billions of dollars into the Indian market, even as it scales back its ambitious electric vehicle (EV) push in the United States. The group, with interests spanning automobiles, real estate, and renewable energy, sees India as a crucial growth pillar to offset challenges in Western markets.
Massive Financial Commitment to Indian Growth
Vingroup has unveiled a two-pronged, multi-billion dollar investment plan for India within a single month. On December 4, its EV arm, VinFast, announced a $500 million investment to expand its manufacturing plant in Tamil Nadu. This move is aimed at facilitating its foray into the electric two-wheeler and electric bus segments.
Just five days later, on December 9, the conglomerate declared an even larger plan to invest $3 billion in a phased manner in Telangana. This comprehensive investment will cover the development of EV charging infrastructure, an electric taxi fleet, and the market entry of its real estate firm, Vinhomes, along with its tourism and entertainment venture, VinWonders. The group will also explore establishing new EV manufacturing facilities in the state.
In total, Vingroup has already committed $2 billion to its auto venture VinFast globally, with the additional $3 billion for India earmarked for the broader EV ecosystem and new business lines.
Contrasting Fortunes: India's Rise vs. US Slowdown
The aggressive Indian expansion comes against the backdrop of a deliberate slowdown in the US market. VinFast Chairperson Thuy Thu Le informed US investors in November that the company is taking its foot off the accelerator there. "Given the tariff situation and the instability in the EV market, we just need to see how that settles before we kind of push hard in the US," she stated during an earnings call on November 21.
The data underscores this shift. In the US, VinFast's dealership count has fallen to 22, and its sales more than halved this year, with only 1,500 EVs sold between January and October. Its shares have also declined by 18% year-to-date, underperforming the Nasdaq.
India presents a starkly different picture. Since starting operations, VinFast has sold 700 vehicles in just three months. Its dealership network has quickly reached 24 outlets and is set to expand to 35 by year-end. The Tamil Nadu plant is already operational with an annual capacity of 50,000 units, scalable to 150,000.
A Diversified Strategy for the Indian Market
Pham San Chau, Managing Director and CEO of Vingroup Asia, emphasized India's distinct role. "India is a strategic growth pillar in VinFast’s overseas portfolio, complementing mature markets like the US with high-growth, high-potential markets," he said. He clarified that it is not about replacing the US but building a resilient, multi-market presence.
Analysts view this diversified approach as a smart move. Puneet Gupta, Director at S&P Global Mobility, noted that Vingroup's investments in infrastructure and other businesses help build consumer trust and brand recall, which will ultimately benefit its automotive bid. He also highlighted that the Indian market offers a key cushion as it is insulated from direct competition from Chinese automotive players.
The bullish outlook is driven by robust EV sales growth in India, which surged about 80% to nearly 120,000 units from April to November, according to industry data. VinFast aims to compete with established players like Tata Motors, Mahindra & Mahindra, and Hyundai in this expanding market.
With founder Pham Nhat Vuong personally committing over $2 billion to support VinFast's global expansion, and the group expecting 70-80% of its sales to come from Vietnam next year, the increasing share of international sales will be significantly powered by its Indian ambitions.
