VinFast gets 400 acres in Tamil Nadu's Thoothukudi for EV plant

Chennai: Vietnamese electric vehicle major VinFast has been allotted about 400 acres at an industrial estate owned by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) in Thoothukudi for its first India plant, ground breaking ceremony for which is scheduled on February 25.

The “in-principle” allotment of land at Silanatham SIPCOT in the port city, 620 km from Chennai, comes just a month after VinFast and the Tamil Nadu government signed a Memorandum of Understanding (MoU) for building an integrated facility to manufacture electric cars and batteries.

The company has committed to invest $500 million (Rs 4,000 crores) for the first phase of the project over a period of five years and the amount could go up to $2 billion (Rs 16,000 crore).

“The new plant will come up in an area of 380 acres at Silanatham SIPCOT. The government has given in-principle approval for allotment of land. The company will now begin the process of applying for various approvals,” a source in the know told DH.

Chief Minister M K Stalin is likely to participate in the ground breaking ceremony for the manufacturing facility on February 25.

The land parcel where Vinfast’s EV ecosystem will come up is just about 10 km from Thoothukudi port, which will make exports easier for the Vietnamese automaker touted as a competitor to US’ Tesla.

The plant will produce about 1.5 lakh cars a year. With Vinfast’s entry, officials said the Tamil Nadu government is planning to position Thoothukudi-Tirunelveli region as the third automobile hub in the state with companies like Bosch and Yokohama tyres setting up manufacturing units in the region.

“Vinfast also wants its vendors to be close to its plant. We will allot land for them as well as when they ask us in order to ensure that an ecosystem gets created in the area,” the source added. Vinfast will be the first Original Equipment Manufacturer (OEM) in the automobile sector to enter Tamil Nadu in the last 15 years after Renault-Nissan in 2008.

VinFast has the third highest EV market capitalization after Tesla and Toyota despite its foray into the US not being as smooth as expected.

The company, which is part of Vietnam’s biggest conglomerate Vingroup, competes with US’ Tesla and China’s BYD, which assembles vehicles at a facility in Kanchipuram near Chennai, among other EV makers.

The investment from VinFast is seen as a major boost to Tamil Nadu, which has emerged as the EV hub of India, accounting for over 40 per cent of total planned investments in the EV sector, including two-wheelers.