Business

VinFast hits pause on 3 India EV plans

By Sohail Khan 1 September 2026, 2:13 pm

Benchmarks
Nifty23,957.15-123.25

Precious Metal
Gold (MCX) (Rs/10g.)152,510.00-1950.0

Enter search text:

Business News›Industry›Renewables›VinFast puts the brakes on manufacturing some cars in India

Read Today's Paper

VinFast puts the brakes on manufacturing some cars in India
Synopsis

VinFast has temporarily halted development and local manufacturing plans for three electric vehicles in India, asking suppliers to stop work while it reassesses costs. The move affects the VF3, VF6 and VF7 programmes and comes amid the automaker’s struggle to gain scale in India, despite its $2-billion expansion plans.

FILE PHOTO: India's five-day auto show in New Delhi — VinFast has suspended work on local manufacturing of the VF3, VF6 and VF7 in India as it reassesses development costs and its strategy in the market.

New Delhi: VinFast has suspended plans to manufacture three electric vehicles in India and ordered suppliers to halt work on the projects while it reassesses costs, according to two sources and a company memo reviewed by Reuters – a year after the Vietnamese automaker entered a crucial growth market.

The manufacturer has asked suppliers to "hold all activities" on three programmes, including a two-door SUV called VF3 – ‌expected to be ⁠its most ⁠competitive model in the market – and the VF6 and VF7 SUVs, which it imports as kits from Vietnam and assembles in the country.

Also read: VinFast bets big on India with $500 million EV push, eyes global exports via new Tamil Nadu factory

India expansion setback

The suspension marks another setback for loss-making VinFast, which has turned to India for growth after facing difficulties gaining market share in the U.S. and Europe.

The suspension of plans to locally manufacture the three vehicles in India has not been previously reported.

Vinfast opened its first factory outside Vietnam in southern India last year and pledged to invest $2 billion, as it sought to build a regional manufacturing base serving South Asia, the Middle East and Africa.

VinFast did not directly address whether it suspended local manufacturing plans for the three models. ⁠It 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.

While VinFast has publicly stated increasing local sourcing from India, including through partnerships with ⁠domestic suppliers, plans to manufacture the VF3, VF6 and VF7 in the country have not previously been disclosed and were described to Reuters by people familiar with the matter.

"India is an important market in VinFast's long-term business and manufacturing strategy," a company representative told Reuters in a statement, adding that based on market research and consumer feedback it is making "appropriate adjustments" to its products to "better meet the needs of Indian customers".

VinFast's struggle to break into the world's third-largest car market echoes challenges faced by others, including Volkswagen and Nissan, which did not achieve the kind of scale that has helped companies, such as Suzuki and Hyundai, succeed.

In a July memo to suppliers, the automaker said it decided to "temporarily" put on hold all development work ‌related to the VF3, VF6 and VF7. Locally developing and sourcing parts would have allowed VinFast to avoid expensive imports and price its cars more competitively.

Also read: VinFast India partners Shriram Finance for vehicle finance

Supplier investments

The memo also asked suppliers to provide a detailed breakdown of the "total amount invested to date" on the projects that require payment ⁠or reimbursement from VinFast across cost categories such as tooling, engineering and materials, along with "supporting documentation where available".

VinFast did not meet its planned costs for developing parts in India for the three cars, which is why it stopped the work, one of the sources said.

Both sources declined to be named as they are not authorised to speak to the media.

Backed by Vietnam's largest conglomerate Vingroup, VinFast launched in India in September 2025 with its VF6 and VF7 electric SUVs. Its India factory has an initial annual production capacity of 50,000 cars and is scalable to 150,000 units.

The automaker has so far sold about 10,000 cars in India, including to its affiliate ride-hailing company Green SM.

VinFast said in a statement to Reuters it plans to develop India-specific models, rather than just bringing in existing global models.

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our WhatsApp channel)

(Catch all the Business News, Breaking News and Latest News Updates on The .)

…moreless

(You can now subscribe to our WhatsApp channel)

Read More News on
VinFastelectric vehiclesIndia manufacturingVF3 SUVautomaker investmentevolution of car marketVingroupelectric SUVsautomotive supply chainmarket expansion challenges

(Catch all the Business News, Breaking News and Latest News Updates on The .)

…moreless

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year