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    • India

    Vietnam’s VinFast Signs $500 Million Deal to Make EVs in India

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    Vietnam’s VinFast agreed to start manufacturing electric vehicles (EVs) in India on Saturday, with an initial commitment to pour $500 million into planned facilities.

    The carmaker will open its first manufacturing hub in the southern state of Tamil Nadu, with an annual capacity of up to 150,000 vehicles.

    VinFast will also produce EV batteries in the state.

    As part of the deal, India’s Tamil Nadu government committed to providing cleared land for the manufacturing facilities, uninterrupted power supply and other infrastructure support, according to a joint statement.

    The move is part of VinFast’s increasing efforts to expand its overseas footprint. The company made its Nasdaq debut in August and first flagged its Indian expansion plans a month later.

    While India is the world’s third-largest vehicle market, electric models accounted for just about 2% of car sales in the country last year.

    EVs that have entered the market so far, like the Hyundai Kia, cost much higher than conventional fossil fuel-powered models. A lack of adequate charging infrastructure has also been a barrier to EV adoption in India.

    Even so, the Indian government is targeting for EVs to comprise a 30% share of total car sales in the country by 2030. It is also working on a scheme to attract EV makers to manufacture in the country.

    VinFast has committed to investing up to $2 billion in Tamil Nadu, its joint statement with the state said. The initial $500 million commitment will fund the first five years of the project, it said.

    Construction on the project’s EV and battery manufacturing plants is expected to start this year and generate 3,000 to 3,500 jobs locally, the statement said.

    Tamil Nadu’s capital, Chennai, dubbed the Detroit of Asia, and other districts host several EV players, including Indian two-wheeler makers Ola Electric and Ather, and China’s BYD.

    VinFast said the Tamil Nadu project was expected to evolve into a first-class EV production hub in the region.

    The carmaker said it also plans to develop a dealership network across the country.

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