Vietnamese automaker VinFast plans to develop two new electric vehicles specifically for the Indian market, according to five sources cited by media sources.

The move comes weeks after the company suspended plans to manufacture some of its existing global models in India. The two models are internally internally known as VF X and VF Y. VinFast has begun initial discussions with suppliers in India, although the projects remain at an early stage. Five sources familiar with the plans, who declined to be identified because the discussions are private, said the projects are still being evaluated and could change as development progresses.

The move differs from VinFast's earlier approach of adapting its existing vehicle portfolio for India. The loss-making carmaker has faced difficulties achieving scale in the United States and Europe and has identified India as a market for further expansion.

A VinFast spokesperson declined to comment on the new models, saying information about future products would be announced at the "appropriate time".

High costs prompt strategy shift

VinFast suspended plans in July to manufacture three of its existing global models - the VF3, VF6 and VF7 - in India after determining that production costs could not be reduced sufficiently to meet its targeted prices.

The company currently sells the VF6 and VF7 in India. Both models are imported as kits from Vietnam and assembled at the company's Indian factory, and VinFast has said it intends to continue assembling them locally.

The company subsequently held discussions with Indian suppliers regarding the cost challenges associated with its earlier manufacturing plans. In August, VinFast executives travelled from Vietnam to India to meet around 200 local suppliers and discuss the company's plans for the Indian automotive market, according to two sources.

One source said VinFast had decided to involve Indian suppliers from the beginning of the vehicle development process so that pricing and production costs could be assessed at an early stage and the cost issues encountered previously could be avoided.

According to a sixth source familiar with VinFast's local plans, the company intends to use components and production tools already available through Indian suppliers rather than developing the new vehicles entirely from scratch.

The automaker is developing a compact vehicle that will be smaller than the VF6 SUV but slightly larger than the two-door VF3. The vehicle is intended to provide a spacious interior suited to Indian consumer preferences. Its design is still being refined, with VinFast seeking to balance its dimensions with the targeted cost.

The VF X is being positioned as an entry-level model for India, with VinFast targeting a price below US$ 12,000, equivalent to around Rs. 1,148,000 at the time of reporting. This target is roughly comparable with the price VinFast charges for the VF3 in Vietnam, where the model is among its more affordable offerings. However, plans to manufacture the VF3 locally in India have been suspended.

The VF6 currently sold in India is priced at around US$ 19,000 for the base model, while the VF7 starts at US$ 24,250.

A vehicle priced below US$ 12,000 would put VinFast in one of India's largest electric vehicle segments, which is currently dominated by Tata Motors. The segment is also expected to be highly competitive.

VinFast's wider India plans

VinFast has committed to investing US$ 2 billion in India, where it opened its first factory outside Vietnam last year. The company plans to develop the facility into a regional manufacturing base serving markets across South Asia, the Middle East and Africa.

The assembly plant currently has an initial production capacity of 50,000 vehicles a year and can be expanded to 150,000 units annually. VinFast has said it has received investment approval for the second phase of the plant's expansion.

Backed by Vietnam's largest conglomerate, Vingroup, VinFast began selling vehicles in India in September 2025 and has retailed around 10,000 vehicles so far. Vingroup also has business interests in India covering real estate, education and healthcare.

VinFast's plans come as electric vehicle sales continue to increase in India. EVs currently account for more than 7% of total car sales in the country, while the government has set a target of increasing their share to 30% by 2030. EV demand has also increased since the Iran war, as higher petrol prices have contributed to greater interest in electric vehicles.

The India-specific vehicle programme is intended to address the cost and localisation issues associated with VinFast's earlier manufacturing strategy. The use of domestic suppliers, locally available components and existing production tools is expected to allow pricing and production costs to be considered from the initial stages of development.

The specifications, designs, production plans and positioning of the VF X and VF Y have not been finalised. The projects remain under evaluation and could change before VinFast makes an official announcement.