VinFast, a Vietnamese electric vehicle manufacturer and a competitor of Tesla in the global market, has initiated its entry into India. The company commenced the construction of its Rs 160 billion electric vehicle manufacturing facility in Thoothukudi, Tamil Nadu. VinFast has already made a request for a reduction in import duties on its cars for approximately two years, aiming to allow customers to become familiar with the brand and its operations in the state.
The construction marks the beginning of the first phase of VinFast's integrated electric vehicle hub, with an initial investment of around Rs 40 billion, expected to generate over 10,000 jobs. The Thoothukudi project aspires to become a leading electric vehicle production hub in the region, with an annual production capacity of up to 150,000 units.
According to a report from Reuters, Pham Sanh Chau, the company's CEO in India, stated on Sunday that they have proposed a two-year reduction in import duties, lowering it to at least 70-80 percent for a specific range of cars. VinFast believes this reduction is necessary until customers become familiar with the brand. Chau, appointed as the CEO in India in November last year, was previously Vietnam's ambassador to India, Nepal, and Bhutan from 2018 to 2022.
Chau mentioned that the government is still evaluating the company's request, coinciding with Tesla's similar request for a 100 percent reduction in import duties on fully-built electric vehicles. However, Tesla's entry has faced delays as the government has not yet provided a favourable response.
Tamil Nadu's industries minister, T R B Rajaa, expressed pride in adding VinFast to the list of electric vehicle manufacturers in the state. He highlighted Chief Minister M K Stalin's goal of making Tamil Nadu the electric vehicle capital of South Asia. Currently, Tamil Nadu dominates the electric vehicle manufacturing sector in India, producing over 70 percent of electric two-wheelers and 40 percent of electric four-wheelers sold in the country.
The government sees VinFast's facility as more than just another manufacturing unit. It views the establishment as a crucial step in creating a comprehensive industrial cluster in South Tamil Nadu. The region has witnessed various recent investments, such as the JROne footwear cluster in the backward district of Perambalur, which is expected to generate over 40,000 jobs.
Rajaa emphasized Tamil Nadu's advantage in having a skilled talent pool, mentioning initiatives like the Naan Mudhalvan scheme under the Skill Development Corporation of TN, which trains people in electric vehicle and battery technology. He expressed satisfaction that VinFast would be hiring talents trained under the Naan Mudhalvan scheme.
