Vietnam’s VinFast (NASDAQ:VFS) announced Saturday that the electric vehicle maker has signed an agreement to build its first EV facilities in India, aiming to enter the world's third-largest vehicle market.
The electric vehicle manufacturer has struck a deal with the southern state of Tamil Nadu, targeting a potential investment totaling $2 billion. In the initial five years, the company plans to commit $500 million to kickstart the project, as outlined in a joint statement.
Construction on the EV and manufacturing plants is expected to begin later this year, with an estimated creation of 3,000 to 3,500 local job opportunities, as outlined in the statement.
It was reported early last week that the automaker would be opening its first EV facility in the country in Thoothukudi in Tamil Nadu, where it would make EV batteries.
VinFast expressed its anticipation that the Tamil Nadu venture would transform into a leading EV production center in the area, projecting an annual capacity of up to 150,000 vehicles, a bit less than the 250,000 vehicles manufactured at its primary plant in Vietnam.
The capacity of the company’s future battery facility was not specified in the joint statement.
In India, electric vehicle sales constituted only about 2% of total car sales last year. However, the national government aims to escalate this figure to 30% by 2030 and is actively devising a scheme to attract electric vehicle manufacturers.
The Tamil Nadu government has pledged to provide cleared land for the manufacturing facilities, along with an uninterrupted power supply and other essential infrastructure support, as indicated in the statement.
Shares of VFS are down 1.14% in early trading Monday morning.