Vietnam's VinFast Auto to invest $2 billion for EV plant in Tamil Nadu

The EV plant will be based in Tamil Nadu's Thoothukudi

Vietnamese automaker VinFast on January 6 said it plans to invest $2 billion for the setting up an electric vehicle (EV) plant in Tamil Nadu, in a move that is likely aimed at allowing it to gain a strategic foothold in the Indian market.

The company, in a media release, said it has inked a memorandum of understanding (MoU) with the Tamil Nadu government for setting up the EV facility in Thoothukudi.

"VinFast and the state government will work toward a total investment of 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," the Haiphong-based EV maker said.

"This move indicates a significant step in VinFast's expansion into the world's third-largest vehicle market," it added.

Earlier this week, Moneycontrol was the first to report that VinFast will be signing a pact to set up its EV manufacturing facility in Tamil Nadu, where it will also be having an in-house battery manufacturing unit. The same report mentioned that the Vietnamese EV maker will be earmarking the Indian facility as its global EV manufacturing hub.

The construction of the EV and battery manufacturing plants is expected to start this year and is likely to generate 3,000 to 3,500 jobs locally, the company mentioned in its statement.

VinFast also stated that it anticipates its Indian EV project to evolve into a “first-class EV production hub” in the region, with an annual capacity of up to 150,000 vehicles, compared with 250,000 at its main plant in Vietnam. However, it did not specify the capacity of the battery facility.

“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,” Tran Mai Hoa, Deputy CEO of Sales and Marketing, VinFast Global stated in an official release.

Moneycontrol had earlier exclusively reported that VinFast Auto will initially be importing its electric sports utility vehicles (e-SUVs) as completely built units (CBUs), and will import completely knocked down (CKD) kits of its cars that will be assembled in India and a year later.

In an official release, VinFast  affirmed that this investment decision in Tamil Nadu leads to "mutual economic growth" for both the and the state, while also strengthening the "Comprehensive Strategic Partnership" between Vietnam and India.

TRB Rajaa, Minister of Industries of the Government of Tamil Nadu, said: “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.”

In addition to building the manufacturing facilities in Tamil Nadu, VinFast also has plans to establish a nationwide dealership network. While the Carmaker has initial plans to bring in VF6, VF7, VF8, and VF9 electric Sports Utility Vehicles to the country, an India-specific mini battery-operated SUV will also be launched eventually, as reported by Moneycontrol citing well-informed sources.