VinFast breaks ground on its EV plant in Tamil Nadu 50 days after MoU signing

Vietnamese EV manufacturer begins construction of its integrated EV plant at Thoothukudi in Tamil Nadu just 50 days after it signed an MoU with the state government. The strategically located plant with a port nearby could help drive made-in-India VinFast EV exports too.  

By Ajit Dalvi calendar 25 Feb 2024 Views icon9359 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

Exactly 50 days after signing a comprehensive memorandum of understanding (MoU) with the government of Tamil Nadu on January 6, 2024, Vietnamese electric vehicle manufacturer VinFast today had the ground-breaking ceremony of its integrated EV plant at Thoothukudi (formerly Tuticorin) in Tamil Nadu. The plant site spans 400 acres within the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) industrial estate. 

The groundbreaking ceremony saw the presence of M K Stalin, Chief Minister of Tamil Nadu; Dr T R B Rajaa, Minister for Industries, Government of Tamil Nadu; V Arun Roy IAS, Industries Secretary, Member of Parliament – Thoothukudi constituency; Ministers of state, MLAs (Members of Legislative Assembly of Tamil Nadu), senior representatives from the State government and the VinFast India leadership team.

From MoU signing to beginning plant construction in less than two months is probably the fastest for an overseas automaker in India yet, and indicative of VinFast’s ambition to rapidly expand its global manufacturing footprint.

That the VinFast has chosen to do so in India, which is the world’s third-largest automobile market and one of the fastest-growing global economies, is a strategic plan designed to cater to both the domestic Indian market as well as made-in-India EV exports to South Asian, Middle Eastern and African markets. Furthermore, given the strength of the Indian automotive component manufacturing ecosystem, the India project is also a key part of VinFast’s overall goal to strengthen its supply chain for global expansion.

Pham Sanh Chau, CEO of VinFast India, said: "By establishing an integrated EV facility, the company's commitment to job creation, green transportation, and strategic partnerships solidifies VinFast’s position as a major player in the electric vehicle industry. This milestone strengthens the bonds between the robust economies of Vietnam and India, and underscores VinFast's dedication to a zero-emission transportation future, setting the stage for economic growth, innovation, and environmental sustainability in the region."

Dr. T. R. B. Rajaa: "Tamil Nadu will match VinFast’s ambitious growth plans in India and is committed to making zero-emission mobility widely accessible."

Dr. T. R. B. Rajaa, Minister for Industries, Tamil Nadu, stated:“VinFast’s entry into India reaffirms Tamil Nadu’s progressive industrial policies and its role as a global automotive innovation and manufacturing hub. Tamil Nadu will match VinFast’s ambitious growth plans in the country and is committed to making zero-emission mobility widely accessible. We believe the project will substantially contribute to the local economic advancement, job creation, and technical skill development of the people of Tamil Nadu.”

VinFast’s speed at setting up manufacturing plants is seen in its main facility at Cat Hai Island, near the city of Hai Phong in Vietnam. The company broke ground on this plant, spread across 828 acres, in September 2017 – within just 21 months, it built the factory equipped with paint shop, press shop, assembly shop and engine shop to produce electric passenger vehicles, buses and two-wheelers. By 2026, the manufacturing capacity at the Hai Phong plant, which boasts up to 90% automation, is expected to be around 950,000 EVs per annum.

In the US, VinFast broke ground on its first EV factory outside of Vietnam on July 28, 2023 in Chatham Country, North Carolina. The project has a Phase 1 investment of $2 billion and will focus on building VinFast’s VF7, VF8 and VF9 EVs with an expected production capacity of 150,000 units per annum, similar to the VinFast India project. The North Carolina plant is expected to commence production in 2025.

In Indonesia, VinFast announced plans, in September 2023, to invest $200 million in an assembly plant in Indonesia with an annual capacity of up to 50,000 EVs.

VinFast India's integrated EV plant at Thoothukudi will be its fourth plant and third overseas (after the US and Indonesian plants where construction is underway). It will have an annual manufacturing capacity of up to 150,000 units and is expected to generate employment opportunities for up to 3,500 people. Last month, Zac Hollis, former brand director of Skoda Auto India, joined VinFast as its Asia Head. Apart from overseeing the India entry strategy, Hollis is likely to play an important role in picking up key talent for VinFast India

In addition to building the manufacturing facilities in Tamil Nadu, VinFast also plans to develop a nationwide dealership network. This will enable it to build brand presence, considering that VinFast is, at present, not so well known in India. VinFast and the Tamil Nadu government will also explore collaboration in setting up a charging station network.

India as a strategic EV manufacturing and component sourcing base for VinFast
India, which is seeing strong growth for EVs across the two-, three- and four-wheeler segments, could prove to be the Asian and global growth driver that VinFast is looking for. Along with the growing demand for EVs in India, the location of the plant could help give VinFast a fillip in EV exports. With the VinFast India plant located near the Thoothukudi (previously known as Tuticorin) Port, the company will benefit from easy access to shipping facilities.

Furthermore, given the potential of a high level of vehicle localisation in India, VinFast will also derive gains as a result of the well-established automotive components industry which now manufactures a varied range of EV parts for vehicles across segments. Like many other global OEMs, there could be considerable purchase of made-in-India EV parts for VinFast's manufacturing operations both in Vietnam and the upcoming factories in the US and Indonesia.

Some Indian component suppliers like Uno Minda, Spark Minda and Star Engineering have already invested in Vietnam. In an interview to Autocar Professional last year, Vinnie Mehta, director-general, ACMA said: “Vietnam offers a great opportunity for the Indian auto components industry to explore business opportunities for both supplying to the OEMs and the aftermarket.”

VinFast states that it "is committed to providing the Indian market with premium quality products, competitive pricing, and outstanding aftersales services to make electric mobility widely accessible and strengthen the comprehensive strategic partnership between Vietnam and India."

Images of groundbreaking ceremony: TN Guidance

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