In a major boost to Tamil Nadu’s electric vehicle (EV) ecosystem Vietnamese automaker VinFast and the state government have signed a new agreement to expand its manufacturing footprint. The company is set to invest an additional $500 million to produce electric buses and e-scooters at its Thoothukudi facility, broadening its portfolio beyond electric cars.
Under the signed Memorandum of Understanding (MoU) the Tamil Nadu government will allocate approximately 500 acres of land adjacent to VinFast’s existing plant in the SIPCOT Industrial Park, Thoothukudi. The state has also committed to providing full infrastructural support and applicable incentives to facilitate this second-phase expansion.
Building a Strategic EV Hub
This new investment follows an initial $500 million phase and is part of VinFast’s cumulative planned investment of $2 billion in India. The existing 400-acre facility, currently producing electric cars is being scaled from an initial capacity of 50,000 to 150,000 vehicles annually.
The expansion is designed to establish dedicated production lines for electric buses and e-scooters, covering manufacturing, assembly and testing. This move solidifies VinFast’s strategy to develop Tamil Nadu as a strategic global manufacturing hub and aligns with India’s green mobility objectives.
Local Impact and Long-Term Vision
The project is expected to significantly increase supply chain localization create new skilled employment, and boost the regional economy. “This initiative will allow us to meet a wider range of customer needs,” said Pham Sanh Chau, CEO of Vingroup Asia, highlighting its role in job creation and workforce development.
Tamil Nadu’s Industries Minister, TRB Rajaa, welcomed the move stating it would add momentum to the state’s and India’s green transportation strategy. The government affirmed its commitment to ensuring favorable conditions for VinFast’s long-term growth in the region.
VinFast is rapidly building a comprehensive presence in India with its distribution network already including 24 dealer showrooms across major cities, targeting 35 by year-end.
