A VinFast electric taxi
Credit: Reuters Photo
Chennai: VinFast, a Vietnamese electric vehicle maker touted as a competitor to Tesla, has chosen the port city of Thoothukudi in Tamil Nadu for its India foray.
The company on Saturday announced it will invest up to $2 billion (Rs 16,000 crore) to set up an integrated manufacturing facility to produce electric cars and batteries.
VinFast, in a statement, said it will work with the Tamil Nadu government toward a total investment of up to $2 billion, with an intended commitment of $500 million (Rs 4,000 crores) for the first phase of the project over a period of five years from the commencement date.
The key announcement came on Saturday on the eve of the Tamil Nadu Global Investors Meet during which the state government is expected to announce several big-ticket projects.
VinFast, which has the third highest EV market capitalisation after Tesla and Toyota despite its foray into the US not being as smooth as expected, said the investment will go into building an integrated electric vehicle factory with a capacity to produce 1.5 lakh cars a year. The investment will bring about 3,000 to 3,500 jobs and the construction will begin this year.
The company, which is part of Vietnam’s biggest conglomerate Vingroup, competes with US’ Tesla and China’s BYD, which assembles vehicles at a facility in Kanchipuram near Chennai, among other EV makers.
The investment from VinFast is seen as a major boost to Tamil Nadu, which has emerged as the EV hub of India, accounting for over 40 per cent of total planned investments in the EV sector, including two-wheelers.
Thoothukudi was proposed to VinFast as part of the state government’s efforts to decongest Chennai, known as India’s Detroit, and distribute projects across Tamil Nadu. The presence of a major port helped Vinfast choose Thoothukudi keeping in mind the export market.
Thoothukudi and Tirunelveli in southern Tamil Nadu are emerging as key destinations for investors with companies like Bosch, and Tata Power setting up plants and Malaysia’s Petronas beginning work on a hydrogen gas plant.
“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,” Tran Mai Hoa, Deputy CEO of Sales and Marketing, VinFast Global, said.
Tamil Nadu Industries Minister T R B Rajaa said EV manufacturing companies are not only important economic drivers but also powerful accelerators to the State’s green vision.
“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,” he said.
While Ola, Ather, Simple Energy, TVS Motor Company, and Ampere are some of the big names in the electric scooter sector that have made TN their home, car makers like Hyundai and Renault-Nissan have also invested in expanding their existing plants near Chennai to roll out electric cars.
Before finalising Thoothukudi, Vinfast looked at Manalur in Tiruvallur in Tamil Nadu and in Gujarat, besides exploring the possibilities of reviving the Ford plant in Maraimalai Nagar near Chennai.
The state had in February 2023 updated its Electric Vehicle Policy released in 2019 with a special focus on cell and battery manufacturing to garner investments worth Rs 50,000 crore in the sector and create 1.5 lakh jobs over a period of five years.
The state is also planning to develop two exclusive EV parks in Manallur near Chennai and Hosur, which will also house a Future Mobility Park spread over an area of 300 acres. The Tamil Nadu Electric Vehicles Policy 2023, the second in four years, focusses on measures on the supply and demand sides, much-needed charging infrastructure, and building the ecosystem for EVs.