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Under the agreement, VinFast announced an initial investment of $500 million for the first phase of the five-year project.
The unit will be set up in Thoothukudi and the company says it will create close to 3,000 to 3,500 jobs locally.
The facility is expected to have a production capacity of up to 1.5 million units per year and is part of VinFast’s strategy to strengthen its supply chain capabilities.
Vietnamese electric vehicle (EV) manufacturer VinFast on Saturday (December 6) signed a memorandum of understanding (MoU) with the government of Tamil Nadu to set up an EV manufacturing facility in the state.
Under the agreement, VinFast announced an initial investment of $500 million for the first phase of the five-year project. The EV maker said in a statement that it is “committed” to total investment of up to $2 billion in the state.
“…VinFast and the state government have earmarked $500 million for the first phase of the project, which will span five years from the start date, with total investment expected to reach up to $2 billion. This move marks VinFast’s commitment to become the world’s “This marks an important step in expanding into the third-largest automotive market,” the EV maker said.
The unit will be set up in Thoothukudi and the company says it will create around 3,000 to 3,500 jobs locally. The facility is expected to have a production capacity of up to 1.5 million units per year and is part of VinFast’s strategy to strengthen its supply chain capabilities.
Construction on the project is likely to begin in 2024, according to the statement. The announcement comes days after reports surfaced that VinFast is considering setting up its first manufacturing facility in India in Tamil Nadu to produce EV batteries.
Commenting on the latest developments, Tran Mai Hoa, Deputy CEO of Sales and Marketing at VinFast Global, said: “…we believe that investments in Tamil Nadu will not only bring significant economic benefits to both parties but will also help accelerate economic development” in India and the region’s transition to green energy. ”
Tamil Nadu Industries Minister Talikotai Raju Bal Rajya also chimed in, saying: We believe that with our strong capabilities and unwavering commitment to a sustainable future, VinFast will emerge as a reliable economic partner and contribute significantly to the long-term development of Tamil Nadu. ”
As part of the MoU, the Tamil Nadu government will provide land clearing, uninterrupted power supply and other infrastructure support for setting up the upcoming factory. The EV maker added that the two companies will also “collaborate on charging stations and other related infrastructure opportunities.”
The project is also expected to strengthen the strategic partnership between India and Vietnam. Under the MoU, VinFast will also aim to establish a pan-India dealer network with an aim to strengthen its brand presence and capture a slice of India’s burgeoning EV economy.
However, it is not yet clear whether VinFast is aiming to manufacture electric scooters, passenger cars, or both at the planned factory.
Making EVs in India
The company’s India plans were first revealed in September last year, when VinFast began hiring for sales, legal and back-office roles in the country. Shortly after, in October, VinFast announced plans to build assembly plants in India and Indonesia with an initial investment of up to $200 million.
Around the same time, company executives publicly said that VinFast-backed taxi company GreenSM was preparing to establish a presence in India. In the months since, it has streamlined its plans and found a home in Tamil Nadu.
The move to India was primarily guided by a slew of production-linked incentives (PLIs) announced by the Center and a red carpet rolled out by state governments. From quick land preparation to 24/7 power supply, local governments have done everything possible to attract EV players.
As a result, major global companies such as Elon Musk’s Tesla and Taiwanese battery replacement giant Gogolo have also joined the list of investments in the country. While the former is still in talks with the Tax SOP Center, many other companies have already forged local partnerships to set up bases in the country.
Also at the heart of this “Make in India” pitch is India’s lucrative EV market, which is predicted to swell to $110 billion by 2029. As EVs become more popular and popular among the Indian masses, global players want to gain first-mover advantage. In a huge market like India.
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