VinFast Halts Some EV Production Plans in India Amid Cost Reevaluation

Vietnamese electric vehicle (EV) maker VinFast has reportedly paused production plans for three models in India and asked suppliers to halt related work, according to two sources and a letter seen by Reuters. The decision affects development projects for the VF3 electric SUV, which was expected to be the company's most competitive model in India, as well as the VF6 and VF7, which are currently imported as components from Vietnam and assembled in India. The letter, sent to suppliers in July and obtained by Reuters, stated that the company had decided to "temporarily" postpone all development work related to the VF3, VF6, and VF7. Local production in India was key to VinFast avoiding expensive import duties and offering more competitive pricing. The letter also requested partners to provide detailed statistics of "all expenses incurred" for the projects for VinFast to pay or compensate, including costs for molds, engineering, materials, and accompanying documentation. An internal source told Reuters that VinFast paused the projects because the cost of developing components for these three models in India exceeded the projected budget. While VinFast did not directly comment on the Reuters report, the company told the BBC that there were no changes or pauses to the production plans for the VF6 and VF7 models currently being sold in India. A VinFast representative responded via email that these models "continue to be assembled at the Thoothukudi factory (in Tamil Nadu state) in CKD (Completely Knocked Down) form to meet market demand." The company also stated that the second phase of expansion for its factory in Thoothukudi has been officially approved and affirmed that India is an important market in its long-term business and production strategy. Regarding the VF6 and VF7, the company said it has conducted research programs to assess the preferences and expectations of local consumers for these two models in order to "make appropriate adjustments." This development comes as VinFast is undergoing a significant restructuring, including the divestment of its manufacturing operations in Vietnam. The company has been focusing more on Asian markets as growth in European and American markets has not met expectations. Assets related to the manufacturing plant project in North Carolina, USA, contributed to an increase in the company's net loss in the fourth quarter of 2025 compared to the same period the previous year. VinFast's challenges in penetrating the Indian market are similar to those faced by Volkswagen and Nissan, which struggled to achieve sufficient production scale to compete with giants like Suzuki and Hyundai, Reuters suggested. In response to BBC News Vietnamese, VinFast stated that instead of simply distributing vehicles from its global portfolio, the company aims to design, develop, and produce new vehicle lines specifically suited to the characteristics of the Indian market, linked to the goal of increasing localization. The company affirmed that it has organized networking conferences in both the South Asian nation and Vietnam, with the participation of over 300 Indian suppliers, to seek opportunities for "broader cooperation and to promote localization."