Vietnamese electric vehicle manufacturer Vinfast, which had the ground-breaking of its integrated EV plant at Thoothukudi (formerly Tuticorin) in Tamil Nadu on February 25, 2024, is to speed up construction at the 400-acre plant site within the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) industrial estate.
VinFast India’s integrated EV plant at Thoothukudi is its third plant after the ones in Vietnam and the USA and second overseas (after the US). Billed to have a manufacturing capacity of 150,000 EVs per annum, the facility is expected to generate employment opportunities for up to 3,500 people.
Pham Nhat Vuong, CEO of VinFast and Chairman of Vingroup, remains bullish on the future of EVs globally and has recently outlined the company’s ambitious growth plans, particularly the expansion into Asian markets. Vinfast, which is known for its fast pace of setting up new plants, now expects to open its India EV factory six months ahead of schedule – in the first-half of CY2025. Meanwhile, construction on a new plant in Indonesia is also slated to commence within the next couple of months.
If the VinFast India plant in Tamil Nadu goes on stream by June 2025, that would mean VinFast would have gone from groundbreaking to manufacturing in a scant 15 months, faster than it did for its main plant in Hai Phong, Vietnam, which took 21 months.
Clearly, VinFast is pressing the metal to the pedal on its India programme. From MoU signing to beginning plant construction in less than two months is probably the fastest for an overseas automaker in India yet, and indicative of VinFast’s ambition to rapidly expand its global manufacturing footprint.
That the VinFast has chosen to do so in India, which is the world’s third-largest automobile market and one of the fastest-growing global economies, is a strategic plan designed to cater to both the domestic Indian market as well as made-in-India EV exports to South Asian, Middle Eastern and African markets. Furthermore, given the strength of the Indian automotive component manufacturing ecosystem, the India project is also a key part of VinFast’s overall goal to strengthen its supply chain for global expansion.
VinFast is known to speedily set up new facilities – the high-on-automation Hai Phong plant in Vietnam was up in 21 months. By 2026, the manufacturing capacity at this facility is expected to be around 950,000 EVs per annum.
VinFast: fast at setting up new plants
VinFast’s speed at setting up manufacturing plants is seen in its main facility at Cat Hai Island, near the city of Hai Phong in Vietnam. The company broke ground on this plant, spread across 828 acres, in September 2017 – within just 21 months, it built the factory equipped with a paint shop, press shop, assembly shop and engine shop to produce electric passenger vehicles, buses and two-wheelers. By 2026, the manufacturing capacity at the Hai Phong plant, which boasts up to 90% automation, is expected to be around 9,50,000 EVs per annum.
In the US, VinFast broke ground on its first EV factory outside of Vietnam on July 28, 2023 in Chatham Country, North Carolina. The project has a Phase 1 investment of US$ 2 billion (about Rs 16,579 crore) and will focus on building VinFast’s VF7, VF8 and VF9 EVs with an expected production capacity of 150,000 units per annum, similar to the VinFast India project. The North Carolina plant is expected to commence production in 2025.
In Indonesia, VinFast announced plans, in September 2023, to invest US$ 200 million (about Rs 1,658 crore) in an assembly plant with an annual capacity of up to 50,000 EVs. Construction work on this facility, its third overseas plant after the USA and India, is set to commence within the next two months.
India-bound VinFast EVs
VinFast is slated to enter the Indian EV market with two completely built import models – a compact SUV (VF e34) and a crossover hatchback (VF 5) before localised manufacturing begins.
In early June this year, the VF e34 electric crossover was snapped testing in India for the first time. The VF e34 is a direct rival to the upcoming Tata Curvv EV, Hyundai Creta EV and Maruti eVX.
In May 2024, the Vietnamese OEM took the covers off the new VF 3 electric SUV in its home market. While there is no confirmation about the VF 3’s India launch, the model’s design was patented in India a few months ago, which means that it could be under consideration for our market.
Indian component suppliers are looking to tap demand in Vietnam. Fourteen suppliers were at the India pavilion at Automechanika Ho Chi Minh City 2023.
India as a strategic manufacturing and component sourcing base
India, which saw EV sales jump 42% YoY to 1.67 million units in FY2024 with demand for electric two-and three-wheelers as well as cars and SUVs scale a new high, could prove to be the Asian and global growth driver that VinFast is looking for.
Along with the growing demand for EVs in India, the location of the plant could help give VinFast a fillip in EV exports. With the VinFast India plant located near the Thoothukudi (previously known as Tuticorin) Port, the company will benefit from easy access to shipping facilities.
Furthermore, given the potential of a high level of vehicle localisation in India, VinFast will also derive gains as a result of the well-established automotive components industry which now manufactures a varied range of EV parts for vehicles across segments.
What’s more, like many other global OEMs, there could be considerable purchase of made-in-India EV parts for VinFast’s manufacturing operations both in Vietnam and the upcoming factories in the US and Indonesia. Some Indian component suppliers like Uno Minda, Spark Minda and Star Engineering have already invested in Vietnam. In an interview to Autocar Professional last year, Vinnie Mehta, director-general, ACMA said: “Vietnam offers a great opportunity for the Indian auto components industry to explore business opportunities for both supplying to the OEMs and the aftermarket.”
VinFast India sales network, charging and exports
In addition to building the manufacturing facilities in Tamil Nadu, VinFast also plans to develop a nationwide dealership network. This will enable it to build brand presence, considering that VinFast is, at present, not so well known in India. VinFast and the Tamil Nadu government will also explore collaboration in setting up a charging station network.
Meanwhile, VinFast is upping the ante in EV charging in its home market. In March 2024, company founder and CEO Pham Nhat Vuong announced the setting up of V-Green Global Charging Station Development Company (V-Green). V-Green’s mission is twofold: investing in the development of a comprehensive charging infrastructure system that prioritises supporting VinFast vehicles, and propelling Vietnam towards becoming one of the world’s leaders in EV charging station density.
Spun off from VinFast’s charging station development division, V-Green, majority-owned by the VinFast founder with a 90% stake, will operate as a global partner, spearheading the creation of a comprehensive charging network. This strategic move will allow V-Green to focus solely on infrastructure investment independently from VinFast, and enable the Vietnamese electric manufacturer to prioritise market expansion and sustainable development.
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