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Can anyone let me know how to create VF email template in Lightning. For email templates in Lightning, we have a tab called Email Templates. When I tried to create a new template, I have an option of text and html but not VF. I can see that the idea of allowing VF templates in lightning is delivered but I cannot find how to create it. Any suggestion will be highly helpful

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Visualforce email template is available in Lightning, but you can't create a new VF template directly from lightning. for that, you have to use classic email templates setup.

You can use same Classic email templates Text, Custom HTML, Letterhead, and Visualforce email templates in Lightning Experience.

To edit Classic email templates, use Classic Email Templates in Setup.

When you need to insert an email template, change the filter to Classic Email Templates.

for further info: https://help.salesforce.com/articleView?id=classic_templates_in_lightning.htm&type=5

https://help.salesforce.com/articleView?id=classic_templates_in_lightning_considerations.htm&type=5

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