VinFast halts supplier work on three India EV models amid cost review

The company has asked its suppliers to "hold all activities" on three products, including a two-door SUV named VF3, which was expected to be its most competitive model in the market, along with VF6 and VF7 SUVs, imported as kits from Vietnam and assembled in India.

VinFast has temporarily suspended plans to locally manufacture three electric vehicle models in India as the Vietnamese automaker reviews project costs, according to a report by Reuters.As per the report, the company has instructed suppliers to stop work on three vehicle programmes, including the VF3 compact electric SUV and the VF6 and VF7 electric SUVs. While the VF6 and VF7 are currently assembled in India using kits imported from Vietnam, the company had been exploring local production and sourcing of components.Tamil Nadu CM MK Stalin Flags Off Production As VinFast Rolls Out Its First EV Car In Thoothukudi The move is a setback for VinFast’s India expansion plans, as the company had identified the country as a key market after facing challenges gaining a foothold in regions such as the US and Europe.VinFast began operations at its first overseas manufacturing facility in Tamil Nadu last year and had announced plans to invest $2 billion in India. The plant was expected to serve markets across South Asia, the Middle East and Africa.The company said its India strategy remains unchanged and that it continues to assemble the VF6 and VF7 models locally. VinFast added that it regularly reviews its product plans based on market conditions and customer feedback. Cost concerns impact supplier plansAccording to the report, VinFast’s decision followed difficulties in meeting targeted costs for developing and sourcing components locally. A July communication sent to suppliers asked them to temporarily stop development activities related to the three models and submit details of investments made in areas such as engineering, tooling and materials.Local manufacturing was expected to help VinFast reduce import costs and make its vehicles more competitive in India’s growing electric vehicle market.Backed by Vietnam’s Vingroup, VinFast entered India in September 2025 with the launch of the VF6 and VF7 electric SUVs. Its manufacturing facility has an initial capacity of 50,000 vehicles annually, expandable to 150,000 units.The company has sold around 10,000 vehicles in India so far, including deliveries to its affiliated ride-hailing company Green SM. VinFast said it intends to develop models specifically designed for Indian consumers rather than relying only on global products.