Dive brief:
- North Carolina is suing auto maker VinFast after the Vietnam-based company allegedly defaulted on obligations related to the construction of a proposed electric vehicle and battery manufacturing plant in Chatham County.
- Attorney General Jeff Jackson filed the lawsuit this Thursdayclaiming that because VinFast “failed its agreements with the state,” North Carolina is exercising its contractual right to acquire the 1,977-acre site and protect taxpayer dollars tied to the project.
- VinFast said it does not expect the facility to be operational until 2028, which the state argued is two years past the agreed construction deadline. North Carolina granted a subsidy for investment in labor development for the project and appropriate up to $450 million for site development and infrastructure improvements by 2022.
Diving knowledge:
The dispute over the unbuilt factory comes as automakers absorb losses on investments related to electric vehicles, driven by sluggish demand and a changing political landscape that eliminated federal tax credits for electric vehicles and stricter emissions regulations.
Stellantis, the maker of Chrysler, Jeep and other brands, posted $26.3 billion losses by fiscal year 2025 as part of a strategic shift away from electric vehicle production. Ford also took one Devaluation of 19.5 billion dollars during the period after scrapping its plans for electric trucks.
Four years ago, VinFast, a maker of all-electric vehicles, had agreed to invest more than $3 billion in a manufacturing facility in Chatham County, with plans to create 7,500 jobs. At the time, it was considered the largest economic development announcement in North Carolina history.
But since then there has been “no progress” on the project, the state said in a recent complaint, arguing that VinFast had “breached” its agreements.
“Vinfast agreed to build a factory and create jobs for North Carolinians — neither did it,” Jackson said in a statement. “When North Carolina makes a deal, we build in protection for taxpayers. VinFast broke the deal, so we’re using that protection to find a project for that site that will create jobs.”
According to the state’s complaint, VinFast did not begin “vertical construction” of its buildings and structures beginning in January 2024 and has not provided evidence that the project could be completed with a delayed deadline. VinFast had requested an extension until July 1, 2028, citing slowdowns in the electric vehicle market that had affected the project and the company’s ability to secure financing. The state rejected the automaker’s request.
The state also argued that VinFast will not be able to meet its job creation commitments this year and did not file its 2025 annual report or respond to state requests for an update on the project. VinFast ceased operations at the site in December 2024, according to the complaint.
“VinFast has not taken any concrete actions to demonstrate that it can and will meet its obligations,” the complaint says. “Under the terms of the agreements, the State has the right and the duty to protect taxpayer dollars and ensure that a prime industrial site is used for its highest and best purpose.”
In January, the North Carolina Department of Justice notified VinFast that it had breached its agreements, but the company argued that it had met its construction deadlines and plans to open the facility in 2028.
