Vietnam’s VinFast looks to open EV battery plant in Tamil Nadu

VinFast, a leading Vietnamese electric vehicle manufacturer, has identified Thoothukudi as the location for its upcoming battery manufacturing plant. The company is poised to make a significant investment, amounting to hundreds of millions of US dollars, in a spacious 400-acre area. Moreover, this will be VinFast’s inaugural investment venture in India.

Originally, VinFast was looking to establish its plant in Chennai by acquiring Ford’s property. However, the deal fell through due to Ford’s unwillingness to sell the land. Reports indicate that the Chief Minister of Tamil Nadu actively sought to attract this investment to Thoothukudi, leveraging its strategic access to sea and air. This move was anticipated to address the employment needs of the local youth who had been migrating to Chennai and other areas.

To redirect the investment to Thoothukudi, the Chief Minister even delegated the task to Industries Minister TRB Rajaa. Minister Rajaa, along with a small team, travelled to Vietnam for discussions with VinFast officials recently. Following brief negotiations and the presentation of a customized package by the delegation, VinFast agreed to invest in Thoothukudi.

Founded in 2017, VinFast boasts a cutting-edge automotive manufacturing complex in Hai Phong, Vietnam, featuring up to 90% automation. The company competes with industry giants such as Tesla and BYD.

Thoothukudi’s emergence as a hub for renewables and green systems aligns with the broader global trends. The recent investment is expected to bolster the upcoming Global Investors Meet aroma that is scheduled to take place in Chennai in the coming week.

Incentives On Horizon For EV Battery Makers

As of 2022, the Indian EV market holds a valuation of $3.21 billion, boasting a remarkable compound annual growth rate of 66.52 percent. Projections indicate that the market size will burgeon to $114 billion by 2029. Given the escalating sales of EVs in India, the government has established an ambitious target of achieving 30 percent electrification of the country’s vehicle fleet by the year 2030.

The government is considering initiating a competitive bidding process for an incentive scheme worth around Rs 8,000 crore, specifically aimed at fostering the production of electric vehicle batteries. Successful bidders under this scheme will be required to establish state-of-the-art chemistry battery plants, collectively contributing to a capacity of 20 gigawatt-hours.

Numerous electric vehicle (EV) battery manufacturers, encompassing both domestic and international entities such as LG Energy Solution, Mahindra & Mahindra, Amara Raja, Exide Industries, and L&T, have expressed strong interest in participating.