Tesla rival Vietnam’s VinFast Auto is setting up an electric vehicle (EV) and battery manufacturing facility at Thoothukudi, near Chennai, which will have the capacity to produce 150,000 EVs in the first phase, a person aware of the developments told ET.
The total investment in the 400-acre facility could eventually touch as much as $1 billion or even more, the person said, adding that VinFast is likely to make an official announcement on Saturday.
"The plant's capacity in phase one is likely to be around 150,000 cars and VinFast is targeting manufacturing 50,000 units at the plant in the first year," the person cited above said, requesting anonymity.
VinFast, the EV arm of Vietnam’s biggest conglomerate Vingroup, had said in October that it would build assembly factories in India and Indonesia with annual capacities of 50,000 cars each, entailing an initial capital expenditure of up to $200 million. However, people ET spoke to said the projected investment is likely to be much larger.
"They have indicated that the investment could go up to being a billion dollars or more but until it is formalised and announced, we cannot comment," a second person said.
Queries sent to VinFast remained unanswered until press time.
ET had reported in October that VinFast was evaluating potential sites for its planned factory in India and had reviewed two locations in Tamil Nadu - Manalur and Thoothukudi.
At the time, the company said it aimed to start assembling vehicles by 2026 in what it has termed as a market with “tremendous potential.”
VinFast had temporarily become the world’s third-most valuable carmaker in August following its listing on Nasdaq.
VinFast expects to assemble vehicles from completely-knocked-down kits or CKDs in Indonesia and India. The establishment of factories in these markets can provide access to government incentives for local manufacturing, relief from certain tariffs and taxes, and access to raw materials at attractive rates, it noted.
Founded in 2017, VinFast recently announced that for its next phase of development starting in 2024, it plans to roll out dealership networks in new market clusters including India.
Although smaller in size compared to the likes of Tesla, VinFast is expanding fast and has ambitious plans to take on the Elon Musk-owned firm in the US where Tesla has more than a 50% market share.
VinFast currently has a manufacturing facility in Hai Phong in Vietnam. On July 28, the company broke ground for its first American factory in North Carolina which spans across 1,800 acres and consists of main production areas for general assembly, body, and paint shops in addition to other manufacturing facilities. It said its annual production capacity is expected to reach 150,000 vehicles in the first phase.