VinFast Plans to Establish Electric Vehicle Facility in Tamil Nadu with Initial Investment of $500 Million.
Discover VinFast's ambitious plans with an annual facility capacity of 150,000 units in Thoothukudi, focusing on local job creation and bolstering supply chain capabilities. Explore the future of automotive innovation and economic impact.
Summary:
VinFast Unveils $500 Million Initial Investment in First Phase of Project Spanning Five Years.
Thoothukudi Chosen for Unit Setup, Expected to Generate 3,000-3,500 Local Jobs, Says VinFast.
VinFast's Facility Plans Include Annual Capacity of 150,000 Units to Enhance Supply Chain.
On Saturday, December 6, Vietnamese electric vehicle (EV) manufacturer VinFast signed a Memorandum of Understanding (MoU) with the Tamil Nadu government to initiate the establishment of an EV manufacturing facility in the state.
As part of the agreement, VinFast has declared an initial investment of $500 million for the project's first phase, extending over a period of five years. In an official statement, the EV manufacturer expressed its commitment to strive for a total investment of up to $2 billion in the state.
VinFast and the state government are collaborating towards achieving a comprehensive investment totaling up to $2 billion. The intended commitment for the first phase of the project is $500 million, covering a span of five years from the project's commencement date. This strategic move signifies a substantial leap in VinFast's expansion into the world's third-largest vehicle market.
The establishment will be situated in Thoothukudi and is anticipated to generate approximately 3,000 to 3,500 local jobs, according to the company. With an envisioned annual capacity of up to 150,000 units, the facility plays a key role in VinFast's strategy to fortify its supply chain capabilities.
As indicated in the statement, the construction of the project is expected to commence in 2024. This announcement follows closely on the heels of reports suggesting VinFast's interest in establishing its initial manufacturing facility in Tamil Nadu for the production of EV batteries in India.
In response to the recent developments, Tran Mai Hoa, VinFast Global's deputy CEO of sales and marketing, commented, "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."
Adding his perspective, Thallikotai Raju Balu Rajaa, Tamil Nadu's minister of industries, stated, "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."
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In accordance with the Memorandum of Understanding (MoU), the Tamil Nadu government will provide land clearances, continuous power supply, and additional infrastructure support for the forthcoming plant. The electric vehicle manufacturer also mentioned that both parties will work together on exploring possibilities related to charging stations and other associated infrastructure.
The initiative is anticipated to strengthen the strategic partnership between India and Vietnam. In alignment with the Memorandum of Understanding (MoU), VinFast will additionally strive to build a nationwide dealership network in India, focusing on enhancing brand visibility and capturing a share of the expanding Indian electric vehicle market.
Nevertheless, there is still ambiguity regarding whether VinFast intends to produce electric scooters, cars, or a combination of both at the upcoming plant.
Producing Electric Vehicles in India
The company's intentions to enter the Indian market surfaced in September of the previous year, marked by VinFast's recruitment efforts for sales, legal, and back-office positions in the country. Shortly after, in October, VinFast unveiled its strategy to establish assembly factories in both India and Indonesia, with an initial investment of up to $200 million.
During that period, a high-ranking company official announced that VinFast-supported cab operator Green SM was preparing to expand its operations in India. Over the following months, the company has refined its plans and settled in Tamil Nadu.
The decision to venture into India has primarily been driven by the series of production-linked incentives (PLIs) introduced by the central government and the welcoming approach adopted by state governments. Local authorities have gone the extra mile, expediting land clearances and ensuring round-the-clock power supply, in their efforts to attract electric vehicle (EV) players.
This trend has garnered interest from major global players like Tesla led by Elon Musk and Taiwanese battery-swapping leader Gogoro, both expressing intentions to invest in the country. While discussions with the government for potential tax incentives are ongoing for Tesla, several other companies have already formed local partnerships to establish their presence in India.
Central to this 'Make in India' initiative is the enticing Indian electric vehicle (EV) market, anticipated to surge to $110 billion by 2029. With the increasing acceptance and adoption of EVs among the Indian population, international players are eager to secure a first-mover advantage in this vast and rapidly growing market.
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