The programme is now running more than three years late and over budget, with the permanent secretary at the MOD, Stephen Lovegrove stating "no commitment to manufacture has been made".
Writing to the chairwoman of the Commons spending watchdog, Mr Lovegrove said the Warrior was currently suffering from "shortfalls in fightability, lethality, survivability, growth potential and safe operation".
The overhaul, which is being carried out by US defence company Lockheed Martin, will see the vehicles being fitted with new gun turrets and stabilising 40mm cannon along with more armour and electronics updates.
This would allow for more accurate firing while in motion and would push the vehicles out of service date from 2025 to 2040.
The Warrior vehicle first entered service in 1988 and was used in the First Gulf War, Bosnia and Iraq.
A total of 380 of the UK's 789 vehicles will be upgraded, with 245 due to receive new turrets.