VinFast sued as US factory construction halts
The Attorney General of North Carolina, USA, has sued VinFast because the construction of its electric vehicle factory in the region has come to a halt. According to a report by Carscoops on Saturday, North Carolina Attorney General Jeff Jackson is suing the Vietnamese automaker with allegations that the company has “breach its agreement with the state in the development of electric vehicle and battery manufacturing facilities in Chatham County.”
Four years ago, VinFast announced plans to build a new production facility in North Carolina, which was targeted to begin vehicle production in 2024. The groundbreaking ceremony for the factory was symbolically held in 2023. During the first phase of development, an investment of up to US$2 billion was required to build a complex spanning 1,800 acres, which would include five main production areas: vehicle body production, assembly, pressing, painting, and an energy centre.
The factory, with an annual production capacity of up to 150,000 units, was intended to produce the VinFast VF 7, VinFast VF 8, and VinFast VF 9 models. After delaying the production schedule to 2025, VinFast temporarily suspended its plans in July 2024 following a difficult business launch in the US. At that time, the company stated that the new factory would begin operations in 2028 on a smaller scale than originally planned.
The suspension of the VinFast project has angered local authorities because the company had received Job Development Investment Grants to build the plant, and the North Carolina General Assembly had allocated US$450 million to support “land preparation, transportation improvements, as well as water and sewage infrastructure related to the project.”
According to the Attorney General’s office, VinFast performed land clearing and levelling in 2023 but failed to meet several key obligations and performance targets outlined in the agreement. The agreement was designed to protect taxpayer money and requires the automaker to return “certain land preparation funds if specified milestones are not met.” The agreement also grants the state government the right to take over the project site if the company fails to meet key performance requirements.
Under the agreement, the facility was supposed to be operational by July 2026 and create 1,750 jobs by the end of 2026. The North Carolina Department of Justice informed VinFast in January 2024 that the company was deemed to have failed to meet the agreement and that the government intended to take over the project site.
“VinFast agreed to build a factory and create jobs for the citizens of North Carolina – they have done neither,” said Attorney General Jackson. VinFast has denied the allegations, stating that it has met construction deadlines and will open the factory in 2028. The company noted that recent changes in US policy regarding the electric vehicle industry have affected the project schedule, necessitating additional time to evaluate the conditions for project implementation.