Leading Vietnamese electric car maker VinFast has been allocated about 400 acres in an industrial park in Thoothukudi that is under the jurisdiction of the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) for its first plant in India. The groundbreaking ceremony for the project is scheduled for February 25.
A month after VinFast and the Tamil Nadu government inked a Memorandum of Understanding (MoU) for the development of an integrated plant to produce batteries and electric vehicles, the company was given “in-principle” access to land at Silanatham SIPCOT in the port city, which is located 620 kilometers from Chennai. The company has agreed to invest $500 million (about Rs 4,000 crore) over five years for the project’s initial phase, with the prospect of up to $2 billion (around Rs 16,000 crore).
It is intended for the new factory in Silanatham SIPCOT to occupy 380 acres. The land allotment has received preliminary approval from the government. An individual with knowledge of the circumstances told DH that “the business will now begin the procedure of requesting different permissions.”
How will the new plant help VinFast?
As a rival to the US-based Tesla, the Vietnamese manufacturer will have an easier time exporting its goods because VinFast’s EV ecosystem will be developed on a block of land that is just around 10 kilometers from Thoothukudi port. This plant is expected to generate about 1.5 lakh cars a year. According to officials, VinFast’s entry will help the Tamil Nadu government position the Thoothukudi-Tirunelveli area—which is already home to manufacturing plants for companies like Bosch and Yokohama tires—as the state’s third automotive hub.
VinFast also wants its suppliers to be close to its location. “To make sure that an ecosystem is established in the region, we will grant them land as well as when they want it,” said the source. VinFast will be the first OEM in the automotive industry to enter Tamil Nadu in the preceding 15 years, following Renault-Nissan in 2008.
Despite having a less successful US debut than anticipated, VinFast is currently the third-largest EV market capitalization, behind Toyota and Tesla. As a branch of Vingroup, the biggest conglomerate in Vietnam, the company faces competition from EV producers such as BYD in China and Tesla in the US, which assembles EVs at a plant in Kanchipuram, near Chennai.
Tamil Nadu, which has emerged as India’s EV hub and is in charge of more than 40% of all planned investments in the EV sector, including two-wheelers, is anticipated to gain a great deal from the VinFast investment.
