EV manufacturer Vinfast, enters India’s EV race, launching its production with its phase 1 investment of $500M in Tamil Nadu.
Vietnam’s VinFast has officially commenced manufacturing at its first Indian facility in Thoothukudi, Tamil Nadu. The $500 million Phase-1 unit will roll out 50,000 electric vehicles annually, scalable to 150,000. The company expects to create over 3,000 jobs locally.
The plant inauguration follows a rapid deployment timeline. After inking an MoU with the Tamil Nadu government in February 2024. VinFast has been working on land acquisition, finalising vendors, and hiring its first cohort of Indian engineers. By June, the company had entered talks with Indian banks for a $200 million loan to support CKD (completely knocked down) kit assembly.
India, the world’s third-largest auto market, sold over 4 million passenger vehicles in 2023. However, electric vehicles accounted for just 2% of that figure. With adoption projected to reach 30% by 2030, VinFast is betting on early-mover advantage and proximity to export routes.
The Thoothukudi site offers strategic access to global shipping lanes via the VOC Port, positioning it as a regional export base to South Asia, the Middle East, and parts of Africa. VinFast has reportedly initiated talks for early shipments to Sri Lanka, Mauritius, and Nepal.
The state’s well-established auto ecosystem, skilled workforce, and infrastructure have been crucial factors in Vinfast’s decision.Tamil Nadu contributes over 30% to India’s auto exports and global OEMs like Hyundai, Renault-Nissan, and BMW. The company assessed 15 sites across six states before finalising the location.
Vinfast enters India with fewer political hurdles than Chinese EV makers, who faced restrictions after border tensions. By committing to local manufacturing, Vinfast bypasses high import duties and taps into government support, positioning itself better than rivals reliant on imports or joint ventures.
The company is realigning its strategy after limited success in Europe and the United States. It has already launched a plant in Indonesia and is expanding operations in Thailand and the Philippines. Although Vinfast tripled its global sales to 97,000 units in 2024, the majority were within Vietnam.
