VinFast Pauses Local Manufacturing Plans for Three EVs in India
Vietnamese electric vehicle maker VinFast has suspended plans to manufacture three of its models in India and asked suppliers to halt work on the projects while it reassesses costs, according to two sources and a company memo reviewed by Reuters. The move comes less than a year after the automaker entered the Indian market, which it views as central to its long-term growth strategy.
The suspension affects the VF3, a two-door SUV expected to be one of VinFast's most competitive models in India, along with the VF6 and VF7 SUVs. The latter two are currently imported as kits from Vietnam and assembled at VinFast's Indian plant.
In a July memo to suppliers, VinFast asked them to "hold all activities" on the three programmes, according to sources. The company also requested a detailed breakdown of the "total amount invested to date."
Cost Overruns Cited
One of the sources, speaking on condition of anonymity because they were not authorised to speak to the media, said VinFast had not met its targeted costs for developing and sourcing parts in India for the three vehicles. The source said that the failure to meet planned costs led to the decision to stop work.
VinFast did not directly address whether it had suspended local manufacturing plans for the three models. In a statement to Reuters, the company said it has not changed or suspended plans for the VF6 and VF7 models currently on sale in India and will continue to assemble them at its factory.
"India is an important market in VinFast's long-term business and manufacturing strategy," a company representative told Reuters, adding that based on market research and consumer feedback, the company is making "appropriate adjustments" to its products. VinFast also said it plans to develop India-specific models.
The company's India factory, located in southern India, is its first outside Vietnam. The plant opened last year and operates at an initial production capacity of 50,000 vehicles annually, which can be scaled to 2000 to 150,000 units.
VinFast launched its India operations in September 2025 with the VF6 and VF7 electric SUVs. The automaker has sold about received about 10,000 vehicles in India so far, including sales to its affiliated ride-hailing company Green SM.
A Challenging Expansion
The suspension marks another challenge for the loss-making VinFast company, which has turned to India for growth after facing difficulties gaining market share in the US and Europe. The company pledged to invest $2 billion in India to build a base that would serve South Asia, the Middle East, and Africa.
The decision to suspend local production plans for the three models had not previously been publicly reported, and the plans came to light neither through this reporting, having been described to Reuters by people with knowledge of the matter.
Context and Next Steps
VinFast's move comes as it reassesses its cost structure across markets. The company's localisation efforts are a key element of its strategy to be competitive in the world's third-largest car market. The company has been working to increase local sourcing in India and has partnerships with suppliers, but it has not yet met its cost targets for the three models in question.
The annual production capacity of the plant suggests that VinFast's plans for India were ambitious. The company initial operations launched with a $2 billion investment pledge, and the factory was seen as a foundation for exports to neighboring regions.
VinFast said it will continue to assemble the VF6 and VF7 from imported kits, which allows it to maintain its offerings in India while re-evaluating the economics of full local production. The company said the reassessment of the VF3, VF6, and VF7 manufacturing plans would not affect the two models currently sold locally.
Looking Ahead
The suspension comes as VinFast navigates its expansion strategy in a competitive global EV market. The company's future in India will depend on its ability to balance its investment with cost efficiency and market demand. VinFast has said it intends to develop India-specific models, and the current pause on the local development of the three programs may lead to a further refinement of its approach in the country.
For now, the company continues to sell and assemble the VF6 and VF7 at its Indian factory, and it remains committed to India over the long term, according to its representatives.