VinFast to invest $500 mn to set up EV factory in India

Vietnamese electric vehicle manufacturer VinFast has committed to invest $500 million to establish an integrated electric vehicle facility in Tamil Nadu as the carmaker eyes expansion into the world's third-largest auto market.

VinFast and the state of Tamil Nadu agreed to invest up to $2 billion, with an intended commitment of $500 million for the first phase of the project, spanning five years from the commencement date, according to a joint statement.

The investment is expected to generate approximately 3,000 - 3,500 employment opportunities locally.

The plan to expand into India aims to seize growth opportunities in the world's most populous nation and rapidly expanding EV market. This initiative forms a crucial part of VinFast's strategy to establish a strong presence in key markets and strengthen its supply chain for global expansion.

Situated in Thoothukudi, the VinFast Tamil Nadu project aims to evolve into an electric vehicle production hub in the region, with an annual capacity of up to 150,000 units. Construction of the plant is anticipated to begin in 2024.

“VinFast's green transportation development project is its third manufacturing project and the largest investment in Tamil Nadu's history. Considering the tangible economic and social benefits that are engendered due to the establishment of the project, the Government of Tamil Nadu also commits to providing cleared land for the manufacturing facilities, uninterrupted power supply, and other infrastructure support on a best-effort basis. Additionally, both parties will continue to collaborate and discuss opportunities for charging stations to steer toward a clean mobility future,” the statement says.

In addition to building the manufacturing facilities in Tamil Nadu, VinFast also intends to set up a nationwide dealership network. “This approach is to establish a strong brand presence and swiftly connect with customers across the country,” it says.

The electric carmaker says its project in Tamil Nadu will pave the way for green transportation development, targeting 30% of newly registered private cars to be electric. This aligns with the state government's initiatives to minimise carbon emissions in the transportation sector.

“The MoU demonstrates VinFast's strong commitment to the sustainable development and vision of a zero-emission transportation future. We believe that investing in Tamil Nadu will not only bring considerable economic benefits to both parties, but will also help accelerate the green energy transition in India and the region,” says Tran Mai Hoa, deputy CEO of Sales and Marketing, VinFast Global.

“EV manufacturing companies are not only important economic drivers but also powerful accelerators to the State’s green vision. We are delighted that VinFast has chosen to invest in Tamil Nadu to establish its integrated EV facility. Possessing robust capabilities and unwavering commitment to a sustainable future, I believe that VinFast will emerge as a reliable economic partner and substantial contributor to Tamil Nadu’s long-term development,” TRB Rajaa, minister of Industries of the Government of Tamil Nadu.