Vietnam's VinFast is set to establish its first production facility, including an electric vehicle (EV) and battery manufacturing plant, in Thoothukudi district, Tamil Nadu, India, Reuters and TechCrunch reported.
The construction is expected to commence in 2024, with an annual production capacity of up to 150,000 vehicles, creating 3,000 to 5,000 job opportunities locally. The statement did not specify the capacity of the battery facility.
India's southernmost state, Tamil Nadu is a significant automotive manufacturing hub in India. Renowned companies such as BMW, Hyundai Motor, Renault-Nissan, and BYD, and local electric two-wheeler manufacturers such as Ather Energy and Ola Electric have existing facilities.
VinFast, established in 2017, started producing EVs in 2021 and went public in the U.S. in August 2023. Just a month later, the company announced its expansion plans in India.
Apart from Vietnam and India, VinFast is targeting markets in the United States and Canada as the company intends to establish a nationwide dealership network in India.
While electric vehicles currently constituted about 2% of car sales in India in 2023, the Indian government aims to increase the electric vehicle market share to 30% by 2030. It is actively working on formulating incentives for EV manufacturing.
Despite VinFast's ambitious investment in India to expand its market presence, the company faces financial and product safety challenges. In 2023, VinFast announced layoffs in the U.S. and Canada, and quality and safety concerns regarding its VF8 model have sparked criticism and scrutiny.
In May last year, it was reported that the company had to recall its first batch of vehicles shipped to the U.S. due to a safety issue. The U.S. National Highway Traffic Safety Administration (NHTSA) said 999 of VinFast's VF 8 vehicles demonstrated faulty dashboard display software that could increase the risk of crash, reported Reuters.
So far, Tata Motors leads the electric vehicle market in India. BYD, SAIC's MG, and Hyundai have manufacturing facilities in the country, and Tesla is negotiating with government officials to establish its footprint there.
According to Nikkei Asia, VinFast has announced changes in its top management, with Pham Nhat Vuong, Vietnam's richest person and the founder-chairman of VinFast's parent company Vingroup, taking over as the new CEO, succeeding former CEO Le Thi Thu Thuy. Vuong will oversee VinFast's global production, sales, and marketing operations.
