Vietnam’s OEM Vinfast accelerates establishing EV facility at Tamil Nadu

Vinfast, a Vietnamese manufacturer of electric vehicles, is planning to accelerate construction at its 400-acre plant site within the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) industrial estate. Vinfast broke ground on its integrated EV plant at Thoothukudi (formerly Tuticorin) in Tamil Nadu on February 25, 2024. The integrated EV facility of VinFast India in Thoothukudi is the company's second international location (after the US) and its third plant overall, following those in Vietnam and the USA. With a projected annual production capacity of 150,000 electric vehicles, the plant is anticipated to create jobs for as many as 3,500 individuals.

The CEO of VinFast and Chairman of Vingroup, Pham Nhat Vuong, has recently presented the company's ambitious growth goals, which include a focus on expanding into Asian markets. Vuong is still optimistic about the future of EVs worldwide. Vinfast, which is renowned for building new facilities quickly, currently projects that its India EV facility will open in the first part of CY2025, six months ahead of schedule. In the meanwhile, within the next several months, work is expected to start on a new facility in Indonesia. VinFast would have gone from inception to manufacturing in just 15 months if the Tamil Nadu factory began to stream by June 2025. This would be quicker than VinFast's main plant in Hai Phong, Vietnam, which took 21 months.

VinFast plans to launch two fully imported cars into the Indian EV market before localized manufacture starts: a crossover hatchback (VF 5) and a compact SUV (VF e34). The VF e34 electric crossover underwent its first round of testing in India at the beginning of June this year. The VF e34 faces off against the Tata Curvv EV, Hyundai Creta EV, and Maruti eVX, which are all forthcoming models. The Vietnamese Original Equipment Manufacturer debuted the new VF 3 electric SUV in its native market in May 2024. The VF 3 may be considered for our market even though there is no official word regarding its arrival in India. This is because the model's design was patented there a few months ago.

The demand for electric vehicles, SUVs, and two- and three-wheelers in India reached a record high in FY2024, with EV sales rising 42% YoY to 1.67 million units. This country may be the Asian and worldwide growth engine VinFast is searching for. VinFast may benefit from an increase in EV exports due to the plant's location and the rising demand for EVs in India. The Thoothukudi (formerly Tuticorin) Port is next to the VinFast India factory, giving the business quick access to shipping facilities.

Moreover, VinFast will benefit from the well-established automotive components sector, which now produces a wide range of EV parts for vehicles across segments, providing the possibility of a high degree of vehicle localization in India.

VinFast is undoubtedly putting a lot of effort into its India program. In less than two months, from the signing of the Memorandum of Understanding to the start of plant construction, VinFast has likely accelerated the pace at which an international automaker has expanded its global manufacturing presence in India. VinFast's decision to operate in India, the third-largest car market in the world and one of the fastest-growing economies in the world, is part of a strategic plan to serve both the Indian domestic market and made-in-India EV exports to South Asian, Middle Eastern, and African markets. Furthermore, VinFast's broader objective to fortify its supply chain in preparation for international expansion includes the India project as a critical component, given the strength of the Indian ecosystem for the manufacturing of automotive components.

VinFast's primary plant, located on Cat Hai Island, close to Hai Phong, Vietnam, demonstrates the company's rapidity in establishing production facilities. In September 2017, the business began construction of its 828-acre plant. In under 21 months, it completed the construction of a paint shop, press shop, assembly shop, and engine shop, enabling it to build electric buses, two-wheelers, and passenger cars. With up to 90% automation, the Hai Phong plant is planned to produce about 9,50,000 electric vehicles annually by 2026.