Vietnamese EV maker VinFast has started operations at its first plant in India, located in Thoothukudi.

The plant targets an annual production capacity of up to 150,000 vehicles.

Cars from the new facility are expected to arrive in Indian showrooms later this month, though pricing and launch dates have not been released.

VinFast is in talks with component suppliers to boost local sourcing.

Some suppliers may move part of their production to India, and one Vietnamese manufacturer has shown interest in shifting plastic production to support VinFast.

The company previously announced up to US$2 billion in investment with the Tamil Nadu government, including US$500 million for the first five years.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Global supply chain diversification creates opening for India manufacturing

VinFast’s decision to source components locally reflects a broader shift away from China-centric manufacturing that’s reshaping global supply chains.

Manufacturing costs in China have more than doubled over the past decade, while geopolitical tensions and tariffs have prompted companies to diversify their production bases1.

Nearly two-thirds of U.S. executives now prefer manufacturing in India over China, driven by these cost and risk factors2.

Major companies are already implementing this strategy. Apple is shifting iPhone production to India and Vietnam, while Nike has moved sourcing to Vietnam and Bangladesh to avoid tariffs3.

VinFast’s suppliers wanting to shift plastic production to India demonstrates how this “China Plus One” approach is creating opportunities throughout entire supply chains, not just for final assembly.

2️⃣ India’s EV market offers growth potential despite current small size

VinFast is entering India’s electric vehicle market at a pivotal moment when growth is accelerating but competition remains manageable.

Recent VinFast developments