Electric Vehicle Manufacturer VinFast Aims India With An Investment Of $2 Billion
VinFast, Vietnam’s electric vehicle manufacturer, is set to embark on an India journey with an initial investment of $500 million that will be used to setup an integrated facility—which will have an annual capacity of as much as 150,000 units—in Thoothukudi, Tamil Nadu.
VinFast has signed a memorandum of understanding with the Tamil Nadu government for a total investment of up to $2 billion. The investment includes production facilities, which are expected to start this year and are projected to generate 3,000–3,5000 employment opportunities, along with developing a pan-India dealership network to cater to consumers in the world’s third-largest four-wheeler market, the company said without giving a concrete timeframe.
Tamil Nadu is a major hub for automobile manufacturing, with prominent companies such as BMW, Hyundai, and Renault-Nissan, along with electric vehicle manufacturers including BYD from China and Indian-based Ather Energy and Ola Electric that specialize in making electric two-wheelers (Ola Electric is looking to list in Mumbai this year.), being centered around there.
“We are delighted that VinFast has chosen to invest in Tamil Nadu to establish its integrated EV facility. Possessing robust capabilities and an 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,” said Dr. Thallikotai Raju Balu Rajaa, Minister of Industries of the Government of Tamil Nadu, in the statement.
“The MoU demonstrates VinFast’s strong commitment to the sustainable development and vision of a zero-emission transportation future. 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,” said Tran Mai Hoa, Deputy CEO of Sales and Marketing at VinFast Global.
VinFast was founded in 2017 and has been making EVs since 2021, with market presence in the U.S. and Canada, in addition to its domestic market in Vietnam. Despite being listed on Nasdaq through a SPAC deal with Black Spade in August the company is still struggling and has financial challenges in its existing markets.
Last year, it was compelled to cut jobs in the U.S. and Canada and faced criticism for the VF8 EV over quality and safety issues, with the share price falling by more than 81% since its initial public offering to $7.02.
However, the company announced its entry to India, the third largest four-wheeler market, with the aim of having 30% electrification by 2030 and only 0.25% penetration of the total car sales of over 51 million, with homegrown Tata Motors dominating and Chinese players BYD and MG Motors looking to expand their presence in October 2022. Moreover, the government has offered incentives and subsidies to grow the EV car market.
VinFast is looking to enter India just after naming its founder and biggest backer, Pham Nhat Voung, as CEO, while South Korea’s Hyundai Motors and Elon Musk”s Tesla are actively working to cater to the growing demand, with Tesla establishing a factory in the western state of Gujarat.
