August 4, 2025

Vinfast, the Vietnamese electric vehicle manufacturer, commenced production at its $500 million manufacturing plant in Thoothukudi, Tamil Nadu, on Monday. This facility is part of a larger $2 billion investment strategy by Vinfast aimed at expansion in India and across Asia. With an initial capacity to produce 50,000 electric vehicles annually and the potential to triple output to 150,000, the factory is strategically located near a major port, positioning it as a key export hub for the region. Vinfast's entry into India reflects the company's desire to tap into one of the world’s fastest-growing automotive markets. Tamil Nadu was selected after considering 15 locations across six states, due to its well-established auto industry, skilled workforce, infrastructure, and a reliable supply chain, according to T.R.B. Raaja, Tamil Nadu’s Industries Minister. He emphasized that this investment will contribute to creating a new industrial cluster in southern Tamil Nadu, which is vital for India's ambition to become a leading global manufacturing hub. The factory's establishment also signals Vinfast's broader strategy to pivot towards Asian markets after experiencing difficulties in North America and Europe. Vinfast has also initiated the development of a $200 million EV assembly plant in Indonesia as part of this shift. In 2024, Vinfast sold nearly 97,000 vehicles, marking a significant growth, although 90% of these sales were within Vietnam. The company aspires to use the Tamil Nadu facility as a base for exports to neighboring countries like Nepal and Sri Lanka as well as to markets in the Middle East and Africa. Vinfast's venture comes at a time when India is embracing electric vehicles, which had a record sale of over 6 million units last year. Even though passenger EV sales represented only 2.5% of total car sales, they saw significant growth, with more than 110,000 units sold in 2024, up from just 1,841 in 2019. The Indian government has set an ambitious target for EVs to account for a third of all passenger vehicle sales by 2030, a landscape that promises opportunities for manufacturers. While the growth of EVs has been primarily fueled by two- and three-wheelers, the increasing availability of attractive four-wheeler options is making inroads. Vinfast plans to introduce its VF6 and VF7 SUV models, specifically designed for the Indian market, later this year. CEO Pham Sanh Chau pointed out that the VF7 is a premium offering that aims to attract Indian consumers without compromising affordability. However, Vinfast is entering a competitive market where established players like Tata Motors dominate the affordable segment. Tata's electric Nexon has historically been successful in the Indian market, which sees EVs as a secondary vehicle mostly for urban use. Vinfast will need to navigate this landscape carefully, building its brand and reputation while maintaining competitive pricing and service quality. The company intends to expand its presence through 32 dealerships in 27 cities and establish partnerships for service and charging infrastructure. The company also benefits from favorable government policies that encourage local manufacturing, which provides it a competitive edge over Chinese EV brands that have had limited access to the Indian market due to geopolitical tensions. Vinfast’s unique position allows it to avoid the baggage larger Chinese rivals carry while benefiting from local incentives. Although Vinfast’s journey in India is promising, it still faces formidable challenges. Consumers are known to be price-sensitive, and establishing trust in product quality will take time. The company’s strategy to recycle batteries, assemble parts locally, and enhance customer service offerings aligns well with market expectations. As it builds its presence, Vinfast’s success may hinge on its ability to resonate with Indian consumers, offering both quality and affordability, similar to what established brands have achieved over the years. Though the path is rocky, the groundwork laid by the factory could set the stage for successful penetration into a market that no automaker can afford to overlook.

Read More at News →

Tags: Vinfast, Electric vehicles, India, Tamil nadu, Ev market,