VinFast to set up its EV unit on 400 acres of land in Tamil Nadu’s Thoothkudi

For its first India facility, VinFast, a leading Vietnamese electric vehicle manufacturer, has been granted around 400 acres in an industrial park controlled by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) in Thoothukudi. The project's groundbreaking ceremony is set for February 25.

A month after VinFast and the Tamil Nadu government signed a Memorandum of Understanding (MoU) for the construction of an integrated facility to manufacture electric cars and batteries, land at Silanatham SIPCOT in the port city was allocated "in-principle" to the company, 620 kilometres from Chennai. For the project's initial phase, the business has committed to investing $500 million (about Rs 4,000 crore) over the course of five years, with the possibility of up to $2 billion (about Rs 16,000 crore).

“The new factory in Silanatham SIPCOT is planned to occupy 380 acres. The government has approved the land allocation in principle. The business will now start the procedure of requesting different permissions,” a person with knowledge of the situation informed DH.

The Vietnamese manufacturer hailed as a rival to the US-based Tesla, will find it simpler to export its products because the land parcel where Vinfast's EV ecosystem will be built is just around 10 kilometres from Thoothukudi port. Roughly 1.5 lakh automobiles will be produced annually at this site. With Vinfast's arrival, authorities stated that the Tamil Nadu government intends to establish the Thoothukudi-Tirunelveli area as the third automotive centre in the state, home to manufacturing facilities established by brands like Bosch and Yokohama tyres.

Additionally, Vinfast desires that its suppliers be near its facility. "To make sure that an ecosystem is established in the region, we will grant them land as well as when they want it," the source continued. After Renault-Nissan in 2008, Vinfast would be the first Original Equipment Manufacturer in the vehicle sector to enter Tamil Nadu in the previous 15 years.

Although VinFast's entry into the US market did not go as smoothly as planned, it still has the third largest market capitalization of EVs behind Tesla and Toyota. The business, which is a division of Vingroup, the largest conglomerate in Vietnam, is in competition with EV manufacturers such as China's BYD and the US' Tesla, which assembles EVs at a plant in Kanchipuram, close to Chennai. The VinFast investment is expected to significantly benefit Tamil Nadu, which has become India's EV centre and is responsible for more than 40% of all planned investments in the EV industry, including two-wheelers.