Vietnam-headquartered auto manufacturer VinFast Auto is all set to initiate the construction of an integrated electric vehicle (EV) manufacturing facility in Thoothukudi, Tamil Nadu, soon, as it plans to penetrate the world's third-largest vehicle market.

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VinFast Auto announced will break ground at the site on February 25, 2024, a move that "represents a significant step towards a strategic partnership between VinFast and the State Government aimed at advancing the development of green transportation in India and in the region", the auto maker said in a statement dated February 21.

VinFast’s integrated EV manufacturing facility in Tamil Nadu is estimated to churn out about 3,000 to 3,500 local job opportunities, demonstrating its commitment to the state’s socio-economic development, it said.

On January 6, VinFast signed a memorandum of understanding (MoU) with the Tamil Nadu government with an initial investment of approximately Rs 425 crore for the first phase of the integrated EV facility, spanning a five-year period from the date of commencement.

The Vietnamese company and the state Tamil Nadu government agreed to work toward an investment of up to $2 billion, with an intended commitment of $500 million for the first five years of the project.

Here are some of the key things to know about the development:

VinFast's global expansion strategy

VinFast's foray into India signifies a crucial step in its global expansion strategy, tapping into one of the world's fastest-growing major economies. The company's swift action in initiating the construction of the EV manufacturing plant just over a month after the MoU underscores its determination and agility in executing its expansion plans.

VinFast India Plant

With an annual capacity of up to 1,50,000 units at full throttle, the facility is poised to address the growing demands of the Indian market while also supporting VinFast's export endeavors to South Asian, Middle Eastern, and African countries.

Supporting India's green transportation initiatives

Moreover, the project aligns with India's green transportation initiatives, reflecting the Centre's efforts to reduce carbon emissions in the transport sector. As part of this agenda, the government aims to have 30 percent of newly registered private cars be electric, emphasizing the importance of sustainable mobility solutions.

Sales targets and global market expansion

VinFast has disclosed its sales target of 1,00,000 EVs for 2024. Having recently entered the US market, the company is strategically positioning itself to compete effectively in various global markets, with a particular focus on high-potential, volume-driven markets like India and Indonesia.

What does VinFast do?

Founded in 2017 and making EVs since 2021, VinFast has announced numerous EV growth plans overseas.

The company made its Nasdaq debut in August and first flagged its Indian expansion plans a month later.

(With inputs from agencies)