VinFast, the Vietnamese carmaker, has agreed to invest up to $2 billion in building an electric vehicle (EV) plant in Tamil Nadu, southern India.
The company, founded and led by Vietnam’s richest man, Pham Nhat Vuong, plans to commit $500 million in the first phase of the project. The plant will be located in Thoothukudi, with construction set to begin in the current year.
VinFast aims to make the facility a “first-class electric vehicle production hub in the region” with a capacity to manufacture 150,000 cars, although specific details about its plans are limited.
VinFast, established in 2017, initially produced internal combustion engine cars before transitioning to an all-EV strategy in 2021.
The company was listed on the US market through a merger with a special purpose acquisition company last year and unveiled plans for plants in North Carolina and Indonesia as part of its global expansion strategy.
Recently, Pham Nhat Vuong took over as VinFast’s CEO, with plans for further expansion and development in the electric vehicle market.
Despite its global ambitions, VinFast has faced criticism for its early EV models and reported losses exceeding $1.4 billion in the first three quarters of the previous year. The company remains dependent on sales to other businesses owned by its parent company, Vingroup.
The memorandum of understanding between VinFast and the Tamil Nadu government was signed at an investors’ conference in Chennai over the weekend. Tamil Nadu is a significant hub for India’s automotive industry and the largest exporter of electronics in the country.
Other companies, including Hyundai, Ola, and Tata Electronics, also announced investments in the state during the Global Investors Meet.
Tamil Nadu Chief Minister MK Stalin has set a goal of building a $1 trillion economy in the state by 2030. The Indian government, led by Prime Minister Narendra Modi, has been working to boost job creation in manufacturing, particularly in the electric vehicle sector.
(With inputs from agencies)
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Vietnamese EV giant Vinfast to set up shop in India, invest over $2bn in factory at Tamil Nadu
