Inframe News – VinFast has temporarily suspended plans to locally manufacture three electric vehicle models in India while the Vietnamese automaker reassesses its costs. The models affected are the VF 3, VF 6 and VF 7, according to a company memo and sources reviewed by Reuters. The move comes only about a year after VinFast entered the Indian market.
The company instructed suppliers involved in the three programs to temporarily stop their activities. The suspension affects development and local sourcing plans that were intended to make the vehicles more competitive in India. VinFast had hoped that greater local production would reduce its reliance on imported components.
The VF 3 was expected to be particularly important for VinFast because of its smaller size and potentially lower price. The compact electric SUV was viewed as a model that could help the company reach a broader group of Indian consumers. Its local production plans are now being reassessed alongside the VF 6 and VF 7 programs.
However, VinFast has clarified that the VF 6 and VF 7 currently sold in India will continue to be assembled at its Thoothukudi facility. The company says those vehicles will continue to use completely knocked-down, or CKD, kits imported from Vietnam.
VinFast said its broader production strategy in India has not been abandoned. Instead, the company is planning to develop future electric vehicles specifically for Indian customers rather than simply adapting models already sold in other markets.
The company also wants to increase the amount of locally sourced content in its vehicles. VinFast has held supplier meetings involving more than 300 Indian companies as it looks for opportunities to build a stronger domestic supply chain.
The decision follows difficulties in meeting planned costs for developing and sourcing components in India. One source told Reuters that VinFast had not achieved its targeted cost levels, prompting the company to temporarily stop development work related to the three programs.
VinFast has also asked suppliers to provide detailed information about money already invested in the affected programs. The requested information includes spending on tooling, engineering and materials, as well as supporting documentation. The move could determine how much of those investments may need to be reimbursed.
The situation represents a challenge for VinFast’s ambitious Indian expansion. The company opened its first factory outside Vietnam in Tamil Nadu and committed around $2 billion to building its Indian manufacturing operation. The facility initially has annual production capacity of 50,000 vehicles and can eventually be expanded to 150,000.
VinFast entered India’s passenger EV market in September 2025 with the VF 6 and VF 7. The company has so far sold more than 10,000 vehicles in the country, including vehicles supplied to its affiliated electric mobility company Green SM.
Despite the manufacturing uncertainty, VinFast says India remains an important part of its long-term strategy. The company argues that studying local customer preferences will allow it to design vehicles better suited to Indian conditions and improve its competitiveness.
VinFast is also seeking approval and investment opportunities to expand its Thoothukudi operation. The company recently received approval for Phase 2 of the plant’s expansion, although details about additional capacity and the investment amount have not been disclosed.
The developments highlight the difficulty of competing in India’s rapidly growing electric vehicle market. VinFast must balance its plans for higher local production with the need to keep vehicle costs under control. Its next generation of India-specific EVs could therefore play an important role in determining whether the company can build a stronger position in the market.
