VinFast plans to develop two India-specific EVs in strategy shift, sources say

NEW DELHI/HANOI: Vietnamese automaker VinFast plans to develop two new electric vehicles for the Indian market, five sources told Reuters, in a strategic shift made just weeks after it suspended plans to manufacture some of its global models there.

The move marks a departure from VinFast’s earlier attempt to adapt existing vehicles for India - a market the money-losing carmaker sees as a chance for growth after it struggled to reach scale in the United States and Europe.

It has pledged to invest $2 billion in India, where it opened its first factory outside Vietnam last year. It wants to build the operation into a regional manufacturing base serving South Asia, the Middle East and Africa.

VinFast has begun initial discussions with suppliers in India for the two new models, internally codenamed VF X and VF Y, but talks are at an early stage, two of the sources said.

The sources, all of whom declined to be identified as the discussions are private, said plans for the car are still being evaluated and could change.

A VinFast spokesperson declined to comment, saying that information about new products would be announced at “the appropriate time”.

VinFast puts the brakes on manufacturing some cars in India, sources and memo say

High costs prompted strategy shift

VinFast in July suspended plans to manufacture three of its current global models, the VF 3, VF 6 and VF 7, in India after it determined it would not be able to bring costs down enough to sell at the prices it had targeted, Reuters reported last week.

The automaker currently sells two models in India - the VF 6 and VF 7 - which are imported as kits from Vietnam and assembled at its India factory. VinFast has said it plans to continue with assembly of the two models.

In August, VinFast executives flew in from Vietnam to meet about 200 Indian suppliers to discuss the company’s plans for the world’s third-largest car market, two of the sources said.

VinFast has chosen to involve Indian suppliers from the outset to iron out pricing and costs early in the development process and avoid a repeat of the same issues, one of the sources said.

The automaker wants to create a compact, affordable model smaller than its current VF 6 crossover SUV but a little bigger than its two-door SUV, VF 3, so it meets local consumer preferences for a spacious vehicle, the source said.

It is still refining the design, this person said, adding that one challenge was striking a balance between the vehicle’s size and its cost.

VinFast is targeting the VF X as an entry-level offering for India and wants to price it below $12,000, two of the sources said. That is roughly what it charges for the VF 3 in Vietnam, one of its more affordable models there. In India, plans to locally manufacture the same VF 3 were among those paused.

Meanwhile, the VF 6 currently sold in India is priced at about $19,000 for the base model, and the VF 7 starts at $24,250.

Vinfast is betting big on India

A car priced less than $12,000 will put VinFast in one of the biggest EV segments dominated by Indian automaker Tata Motors but will also be the hardest to crack.

EV sales in India have been on the rise since the Iran war as gasoline prices increased. Electric models currently make up over 7% of total car sales and the government wants to grow this to 30% by 2030.

Instead of doing everything from scratch, VinFast wants to work with components and tools already available with suppliers in the country to build a new product for India, said a sixth source aware of the company’s local plans.

Backed by Vietnam’s largest conglomerate Vingroup, VinFast started selling cars in India in September 2025 and has so far retailed about 10,000 vehicles. It has broader ambitions in India, including in real estate, education and healthcare.

Its assembly plant has an initial production capacity of 50,000 cars a year and is scalable to 150,000. VinFast said it has received investment approval for the plant’s second phase expansion.