VinFast opens $500 million EV plant in Tamil Nadu, eyes Asian expansion

VinFast sold nearly 97,000 vehicles in 2024, triple its previous year’s total, but 90 percent of those were in Vietnam.

Vietnamese electric vehicle (EV) manufacturer VinFast officially opened its first Indian facility in the southern city of Thoothukudi on Monday. This marks a significant step in its $2 billion India investment plan and broader push into Asian markets.

The $500 million plant, located in Tamil Nadu’s industrial corridor, will initially produce 50,000 electric cars per year, with the capacity to ramp up to 150,000 units.

As per VinFast, the site was selected after evaluating 15 locations across six Indian states, drawn by Tamil Nadu’s robust infrastructure, skilled labor, and port access. This is critical for its ambitions to turn the facility into an export hub for South Asia, the Middle East, and Africa.

“This project will seed an entirely new industrial cluster in southern Tamil Nadu,” said state Industries Minister T.R.B. Raaja, noting its role in India’s manufacturing ambitions.

Notably, the company's latest move is part of VinFast's pivot to Asia after struggling to establish a foothold in the U.S. and European markets. The company recently began work on a $200 million assembly plant in Indonesia and is expanding into Thailand and the Philippines.

VinFast sold nearly 97,000 vehicles in 2024, triple its previous year’s total, but 90 percent of those were in Vietnam.

The company is targeting 200,000 global deliveries in 2025.

VinFast is entering India’s fast-growing EV market, which remains largely dominated by domestic brands like Tata Motors and Mahindra in the affordable segment and Hyundai and MG Motor in the premium space.

While India sold over six million EVs in 2024, four-wheel passenger vehicles made up only 2.5 percent of that total.

Passenger EV sales, nevertheless, jumped from 1,841 in 2019 to over 110,000 in 2024, and the government aims for one-third of all car sales to be electric by 2030.

VinFast plans to roll out its VF6 and VF7 electric SUVs later this year in India. It has already signed deals to open 32 dealerships in 27 cities, with plans to establish local showrooms, service centers, and battery recycling infrastructure.

“VinFast can succeed here if it gets the pricing right and builds trust around its technology,” said Vivek Gulia, co-founder of energy consultancy JMK Research.

VinFast’s Asia CEO Pham Sanh Chau said the company is in talks with multiple component suppliers, some of whom may relocate operations to India to support local production. The company is also engaging Indian firms for charging solutions and repair services.

VinFast has already received initial overseas orders from Sri Lanka, Nepal, and Mauritius, reinforcing the site's strategic potential as an export-oriented facility.

The company will benefit from India’s EV incentives, including tax breaks and land subsidies, which have helped discourage imports and boost local manufacturing. Unlike Chinese EV makers, which face geopolitical pushback in India, VinFast has a clean slate and stands to gain from a more favorable policy climate.

(With inputs from agencies)