VinFast to expand facility for electric two-wheelers, buses in Tamil Nadu

VinFast will invest an additional $500 million to expand its Thoothukudi facility for electric bus and e-scooter manufacturing, under a new MoU with Tamil Nadu

VinFast and the Tamil Nadu government on Thursday signed a memorandum of understanding (MoU) to allocate approximately 500 acres of land in the Sipcot Industrial Park in Thoothukudi to support the expansion of the company’s existing facility to produce electric buses and escooters.

 

This is likely to be seen as an additional $500 million second-phase investment by the company in Thoothukudi to develop new dedicated workshops and production lines for electric buses and escooters, covering manufacturing, assembly, testing and other related operations. During the first phase, it had already invested $500 million, and has already lined up a cumulative investment of $2 billion. The company is already producing electric cars at the unit.

 

This milestone provides an opportunity to VinFast to broaden its product portfolio from electric cars to electric buses, escooters and charging infrastructure, while reaffirming the company’s long-term commitment to the world’s third largest automotive market.

 

For VinFast’s proposed $500 million investment, the state government will apply all applicable incentives, financial support measures, and statutory exemptions in accordance with the prevailing regulations and relevant policies, a statement said.

 

Under the MoU, Tamil Nadu will allocate approximately 500 acres of land adjacent to VinFast’s existing facility in Thoothukudi. The state will also provide support in securing required permits and in establishing essential infrastructure connections such as electricity, water, internal road access, drainage, and waste management.

 

With the signing of this MoU, VinFast takes another step forward in strengthening its manufacturing readiness in the Indian market. The initiative is also expected to increase supply chain localisation, create additional employment opportunities, and support workforce skill development in the region.

 

“The proposed expansion of the Tamil Nadu plant will enable us to broaden our product line-up in India, from electric cars to electric buses and escooters, allowing us to meet a wider range of customer needs. We also expect this initiative to create new job opportunities, advance localisation, and strengthen the skills of the local workforce,” said Pham Sanh Chau, Vingroup Asia chief executive officer.

 

The existing Thoothukudi facility covers 400 acres and is equipped with internationally standardised production lines. It has an initial annual capacity of 50,000 electric vehicles and is being expanded to 150,000 units. The company’s strategy is to develop Tamil Nadu as a strategic hub in its global expansion journey and in its moves to support India’s green mobility goals in the years ahead.

 

“We welcome VinFast’s next phase of planned development of electric cars in Tamil Nadu, and the new introduction of electric bus and escooters production will generate additional momentum for the green transportation strategy of both Tamil Nadu and India,” said TRB Rajaa, Minister of Industries of the Tamil Nadu government.

 

“The state government is committed to working closely with VinFast and ensuring favorable conditions throughout the implementation process to deliver lasting benefits for the community and the regional economy by ensuring that Vingroup thrives in Tamil Nadu and that their flourishing ecosystem provides jobs for Tamil Nadu,” Rajaa added.

 

Since entering the Indian market, VinFast has continuously expanded its comprehensive EV ecosystem that spans manufacturing, distribution, charging infrastructure, after-sales services, and battery recycling, with the Tamil Nadu plant being an important part of this ecosystem.

 

At the same time, the company’s distribution network is rapidly growing, with 24 dealers already operating in major cities and a target of reaching 35 by the end of the year.