North Carolina sues automaker for property of would-be EV plant

VinFast is the defendant of a new lawsuit brought by the state of North Carolina. According to the state’s attorney general, the Vietnamese electric-vehicle startup is in breach of its contract to develop a promised electric vehicle and battery factory in Chatham County, North Carolina.

The state is suing to recover the company’s property and repayment of incentive funds. In 2022, the state’s Economic Investment Committee awarded the company’s U.S. arm a grant in exchange for the company’s promise to create 7,500 jobs and invest $3 billion in the site.

In 2023, VinFast and the state of North Carolina announced the company had broken ground on the site, with an anticipated “phase 1” investment of $2 billion for a 1,800-acre site including production for three of VinFast’s electric vehicles, with production anticipated to start in 2025 and, according to the lawsuit, a deadline for “vertical construction” to start by 2024 and production to start before July 2026.

Failing those deadlines, the agreement says, gives the state the option to buy the land back. In response to questions from local news source WRAL news about the terms of the agreement, Attorney General Jeff Jackson noted that specifics of the contract’s language around “vertical construction” will be dealt with in court.

According to the state, VanFast began to fall back on its commitments after clearing and grading the factory site in 2023. The company has since said it doesn’t expect the factory to become operational until 2028, due to rocky stateside reception of VanFast’s products as well as the loss of the 2022 Inflation Reduction Act electric-vehicle tax credit.

As reported by local news source WRAL News, VinFast itself only learned of the lawsuit through media reports.

What people are saying

“We will review and provide an official response once we receive all relevant materials from the state,” a spokesperson for VinFast told WRAL news.

“VinFast agreed to build a factory and create jobs for North Carolinians – it didn’t do either,” said Attorney General Jeff Jackson, in a press release announcing the state’s lawsuit. “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 this site that will create jobs.”

“North Carolina will always compete aggressively for jobs and investment, but we also protect taxpayers by requiring the company to hold up its end of the deal,” said Governor Josh Stein. “VinFast has not fulfilled its commitments. Today’s action is about protecting taxpayers and getting the Chatham County mega-site back on the market to support future good-paying manufacturing jobs.”  

“North Carolina’s economic development strategy is built on strong partnerships and performance-based agreements that are designed to protect the public interest,” said NC Commerce Secretary Lee Lilley. “While we remain committed to supporting projects and long-term growth, we also have a responsibility to ensure that contractual obligations tied to taxpayer-supported incentives are fulfilled.”