VinFast kicks off Tamil Nadu unit construction, seeks cut in import duty

Vietnam-based electric vehicle maker VinFast, a rival of Tesla in the global market, has set foot in India and began work on building its Rs 16,000 crore EV manufacturing facility at Thoothukudi in Tamil Nadu.

The company has already sought a reduction in import duties on its cars for about two years until customers get familiar with the brand and its unit in the state.

The global major kicked off the construction of the first phase of its integrated EV hub, which may see Rs 4,000 crore of investment initially and will create more than 10,000 jobs.

The Thoothukudi project aims to evolve into a first-class electric vehicle production hub in the region, with an annual capacity of up to 150,000 units.

According to a report in the news agency Reuters, the company’s India chief executive officer, Pham Sanh Chau, said on Sunday that it has already proposed a two-year reduction in the import duty, bringing it down to at least 70-80 per cent for a select number of cars.

This, according to the company, is until customers get familiar with the brand. Chau - who has also served as Vietnam’s ambassador to India, Nepal, and Bhutan between 2018 and 2022 - was appointed as the CEO of the company in India in November last year.

He said the Centre government is still considering the request by the company.

This comes at a time when its rival Tesla had also requested a 100 per cent cut on import duty on fully-built EVs.

Tesla's entry has fallen into the slow track as the government is yet to come out with a favourable response.

“With the addition of illustrious names like Vinfast to the list of EV Manufacturers in Tamil Nadu, we are proud that Chief Minister M K Stalin has closed in on his aim of making Tamil Nadu the EV capital of South Asia and not just India,” said state industries minister T R B Rajaa.

At present, Tamil Nadu is a clear leader with over 70 per cent of all electric two-wheelers and 40 per cent of all electric four-wheelers sold in India being manufactured in the state.

As per data shared by the state government, in the last three years, Tamil Nadu has seen investments to the tune of Rs 10 trillion, creating over 3.1 million jobs.

“The establishment of VinFast's facility is not merely the inception of another manufacturing unit but a pivotal moment in the creation of a comprehensive industrial cluster in South Tamil Nadu.

"The upcoming factory is poised to catalyse the formation of a robust vendor ecosystem, surrounding the VinFast factory with a network of suppliers and ancillary industries,” a government statement said.

The region has seen several investments in the recent past, like the footwear cluster JROne, which will generate over 40,000 jobs in the backward district of Perambalur.

“Tamil Nadu’s biggest advantage is our talent pool and we are already skilling people for EV and battery tech via path-breaking schemes like the Naan Mudhalvan scheme under the Skill Development Corporation of TN.

"We are happy to note that Vinfast will also be hiring talents trained under Nan Mudhalvan,” Rajaa added.

Founded in 2017 and making EVs since 2021, VinFast has also announced numerous EV growth plans overseas, including a factory in North Carolina.