Vietnamese Electric Vehicle (EV) manufacturer VinFast on Monday rolled out its first electric car within 18 months of groundbreaking in February 2024. The first car was rolled out from its greenfield factory at Thoothukudi for the domestic and export markets. Chief Minister MK Stalin oversaw the first car coming out from inside the SIPCOT industrial estate in Sillaanaththam and signed the car.
VinFast rolling out its first car comes a week after global leader Tesla entered the Indian market with its first store in Mumbai. The Indian EV market, which is valued at Rs. 20 lakh crore, is expected to grow to Rs 20 trillion crore by 2030. And as per the government estimates, Tamil Nadu’s EV industry has the potential to touch 40 billion USD by 2030.
Way back in 2017, Tamil Nadu began emerging as the auto capital of India and among the 10 top auto hubs of the world. With the advantage of an already thriving auto manufacturing ecosystem in place, it was but natural that Tamil Nadu would be a dominant player in EVs too. Tamil Nadu started tapping into the electric vehicle market after 2017. The first to set up its facility was the Bengaluru-based Ather. After Ather set up its factory in Hosur, the growth began slowly in the state.
True to its potential, it has emerged as the largest producer of EVs in India- 40 percent of all vehicles and 70 percent of two-wheelers. It was the drafting and unveiling of the EV Policy that propelled the state to this level of dominance in EVs. EV hubs have also been in tier two cities at Tirunelveli, Salem, Madurai, Trichy and Coimbatore in addition to Chennai - a total of six places across the state. Though neighbouring Karnataka was the first to unveil the EV policy, Tamil Nadu remains a frontrunner due to the existing conventional automobile setup. The automobile majors that have their headquarters in Bengaluru are looking at Hosur in Tamil Nadu as their next step to get into the EV market. Incidentally, there is a huge development happening in and around Hosur, which also helps in developing the most backward Dharmapuri region.
Also Read
The state government has created an entire ecosystem in the Hosur region - the EV battery manufacturing units, making the EV majors get into the components from Tamil Nadu itself. For instance, Ola has brought its vendors near its factory in Hosur. Similarly, Simple Energy has also brought the testing track and integrated facilities inside its factory in Hosur. Ola alone has invested Rs 10,000 crores in the Pochampally region in Hosur district. They also have a lithium-ion manufacturing facility in Hosur and have plans to launch four-wheelers in the EV sector. And then Ampere, a homegrown company, set up its facility at Ranipet, two hours away from Hosur. At Panapakkam in the Ranipet district, Tata Motors-Jaguar Land Rover is building a massive passenger vehicle manufacturing unit. In the four-wheeler category, Tamil Nadu is home to several automobile majors like Hyundai, Renault-Nissan and BMW.
VinFast and its entry into Thoothukudi
After Hyundai, Renault-Nissan and BMW, VinFast’s entry has ensured that the state’s EV sector sees a leap in its growth. VinFast’s Thoothukudi plant will roll out - VF 6 and VF 7 - the two models in the premium segment, which premiered at the Auto Expo 2025 in New Delhi. With an investment of Rs 1,600 crore in the first phase, VinFast is expected to build the production unit with the capacity to produce 50,000 cars annually and has also pledged to invest Rs 16,000 crore in total for a capacity of 1.5 lakh cars.
VinFast’s entry into Thoothukudi is a major boost for the industrial cum coastal town, which was marred by protests against Sterlite Copper in 2018. It was alleged that the closing down of Sterlite caused a lot of job losses in the region. “The company will start producing more models from the greenfield factory based on demand,” says Prakalathan Tirupathy, Project Director, VinFast Thoothukudi. The facility has created job opportunities for 3,000 to 3,500 people and over 200 polytechnic students from Thoothukudi.
According to industry sources, the Vietnamese company had scouted for a place to set up its factory at 15 locations across India. It chose Tamil Nadu and particularly Thoothukudi due to skilled workers, good infrastructure, and a reliable supply chain. “This investment will lead to an entirely new industrial cluster in south Tamil Nadu, and more clusters are what India needs to emerge as a global manufacturing hub,” says Tamil Nadu industries minister T.R.B. Raaja.
