Under the pact, VinFast announced an initial investment of $500 Mn in the first phase of the project which will span a period of five years
The unit will be set up in Thoothukudi and, as per the company, will create nearly 3,000 to 3,500 jobs locally
The facility is envisaged with an annual capacity of up to 1.5 Lakh units and is part of VinFast’s strategy to strengthen its supply chain capabilities
Vietnamese electric vehicle (EV) maker VinFast on Saturday (December 6) inked a Memorandum of Understanding (MoU) with the Tamil Nadu government to establish an EV manufacturing facility in the state.
Under the pact, VinFast has announced an initial investment of $500 Mn in the first phase of the project which will span a period of five years. In a statement, the EV maker said that it will ‘work towards’ a total investment of up to $2 Bn in the state.
“… VinFast and the state government will work toward a total investment of up to $2 Bn, with an intended commitment of $500 Mn for the first phase of the project, spanning five years from the commencement date. This move indicates a significant step in VinFast’s expansion into the world’s third-largest vehicle market,” said the EV maker.
The unit will be set up in Thoothukudi and, as per the company, will create nearly 3,000 to 3,500 jobs locally. The facility has been envisaged with an annual capacity of up to 1.5 Lakh units and is part of VinFast’s strategy to strengthen its supply chain capabilities.
The construction of the project will likely commence in 2024, as per the statement. The announcement comes just days after reports surfaced that VinFast was looking to establish its first Indian manufacturing facility in Tamil Nadu for the production of EV batteries.
Commenting on the latest development, VinFast Global’s deputy chief executive officer (CEO) of sales and marketing Tran Mai Hoa said,” … 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.”
Chiming in, Tamil Nadu’s minister of industries Thallikotai Raju Balu Rajaa said, “… 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.”
As part of the MoU, Tamil Nadu government will offer land clearances, uninterrupted power supply, and other infrastructure support for establishing the upcoming plant. The EV maker also added that the two parties will also collaborate on ‘opportunities for charging stations and other allied infrastructure.
The project is also expected to bolster strategic partnership between India and Vietnam. Under the MoU, VinFast will also aim to establish a pan-India dealership network with an eye on shoring up brand presence and grabbing a pie of the burgeoning Indian EV economy.
However, there still appears to be no clarity on whether VinFast aims to manufacture electric scooters or cars or both at the upcoming plant.
Making EVs In India
The company’s India plans first came to light in September last year when VinFast began hiring for sales, legal and back-office jobs in the country. Right afterwards in October, VinFast announced plans to construct assembly factories in India and Indonesia with an initial outlay of up to $200 Mn.
Around the same time, a senior company executive publicly said that VinFast-backed cab operator Green SM was gearing up to establish its presence in India. In the months since then, it has streamlined plans and found its home in Tamil Nadu.
The move to India has largely been led by the slew of production-linked-incentives (PLIs) announced by the Centre and the red carpet rolled out by the state governments. From fast tracking land clearances to 24×7 power supply, local governments have left no stone unturned to attract EV players.
This has also resulted in global giants such as Elon Musk-led Tesla and Taiwanese battery-swapping major Gogoro lining up to invest in the country. While the former is still in talks with the Centre for tax sops, many other companies have already forged local partnerships to set up bases in the country.
At the heart of this ‘Make in India’ pitch is also the lucrative Indian EV market which is projected to balloon to $110 Bn by 2029. As EVs see more penetration and adoption among the Indian masses, global players want to have the first mover advantage in a huge market such as India.
