VinFast, the electric car maker known as the "Tesla of Vietnam", signed an agreement on Saturday to build its first production plant in India to enter the world's third-largest auto market. VinFast and the southern Indian state of Tamil Nadu agreed to work together to invest up to $2 billion, with plans to spend $500 million over the first five years of the project, according to a joint statement.
The project's electric vehicle and battery manufacturing plant is expected to begin construction this year and create 3,000 to 3,500 local jobs, the statement said.
VinFast said the project in Tamil Nadu is expected to develop into a first-class electric vehicle production center in the region, with an annual production capacity of up to 150,000 vehicles, while its main factory in Vietnam has an annual production capacity of 250,000 vehicles. The joint statement did not specify the expected production capacity of the battery factory.
Last year, electric models accounted for only about 2% of Indian car sales, but the Indian government aims to reach 30% by 2030 and is developing a plan to attract electric car manufacturers.
The Tamil Nadu government is committed to providing clean land for manufacturing facilities, uninterrupted power supply and other infrastructure, the statement said.
VinFast said it also plans to establish a nationwide dealer network in India.