Vinfast accelerates global expansion plans by inking historic MoU with Tamil Nadu, India, for major EV investment signalling shift in regional mobility. The Vietnamese EV producer targets 150,000 EVs and eyes 50 markets on its horizon, including Europe.
Vinfast, the foremost Vietnamese electric vehicle (EV) manufacturer and VinGroup subsidiary, has entered into a Memorandum of Understanding (MoU) with the southern Indian state of Tamil Nadu for a substantial investment of up to $2 billion, with an initial commitment of $500 million for the first five years of the project. The move has the potential for significant regional impact, with India standing as the third-largest vehicle market globally.
The company’s manufacturing facility is set to be situated in Thoothukudi, Tamil Nadu, where it will focus on the production of cutting-edge EV batteries. Vinfast’s foray into the Indian market was initially hinted at after its Nasdaq debut last August, signalling the beginning of a new strategic chapter in its international growth plans.
The Vietnamese EV producer is already recognised as a specialist in electric two-wheelers, and Tamil Nadu’s capital, Chennai, (often referred to as the ‘Detroit of Asia,’) already hosts an active EV ecosystem, featuring prominent players such as Indian two-wheeler manufacturers Ola Electric and Ather, alongside China’s BYD - another company that recently announced its inter-regional expansion.
The Vinfast-Tamil Nadu agreement is intended to elevate the region into a premier EV production hub, with an anticipated annual capacity of up to 150,000 vehicles.
The ambitious target, while slightly below Vinfast’s primary plant capacity in Vietnam, naturally sets the stage for substantial economic contributions and employment opportunities, with an estimated 3,000 to 3,500 jobs projected to be generated within the region.
Public-private agreements as catalysts for EV acceleration
In light of India’s goal to achieve a 30% share of electric vehicle sales by 2030, the central government has been actively devising initiatives to attract and support EV manufacturers. Vinfast’s collaboration with the Tamil Nadu government underscores the state’s commitment to facilitating the transformative venture, pledging cleared land for manufacturing facilities, a consistent power supply, and comprehensive infrastructure support, according to reports.
As construction on the EV and battery manufacturing plants is anticipated to commence this year, Vinfast’s entry into the Indian market not only positions the company as a key player in the nation’s evolving automotive landscape but also pushes a collaborative effort to drive sustainable and eco-friendly mobility solutions in one of the world’s most promising markets.
Vinfast’s increasingly International Ambitions
Vinfast has announced that it is set on an ambitious venture to introduce its EVs into the European market in the forthcoming months, marking a decisive step in the company’s global expansion strategy. The announcement, given by Vinfast Chairwoman of the board of Directors, Le Thi Thu Thuy, revealed the company’s intention to further diversify its presence beyond its home base - venturing into the dynamic European automotive marketplace which could pose a challenge to European players as yet another leading national carmaker jostles for position in the European EV market.
Vinfast’s Indian move is a piece in its broader expansionist vision, as the company concurrently targets key markets in Southeast Asia, India and the Middle East.
The carmaker’s comprehensive global strategy doesn’t stop there – the company has set an ambitious target of establishing its presence in a staggering 50 markets worldwide by the year 2024 and sheds light on its proactive approach in addressing the evolving demands and preferences of diverse markets around the globe.