VinFast pushes its NC plant opening to 2028, four years later than first planned

The Vietnamese electric vehicle manufacturer VinFast has again delayed its timetable for opening a manufacturing plant in North Carolina, the automaker told The News & Observer, and now aims to start production there in 2028.

In 2022, when the company first announced plans to build a plant in Chatham County, it said it would begin making cars in North Carolina within two years. VinFast then moved the target startup date to 2025 before saying this spring it was “conducting a thorough review and evaluation of all aspects of the construction process for our North Carolina factory.”

The news agency Reuters first reported the latest delay on Friday.

It’s been almost a year since VinFast and North Carolina leaders ceremonially broke ground at the 1,765-acre site, which sits near the unincorporated town of Moncure about 30 miles southwest of downtown Raleigh. VinFast has yet to begin construction.

As recently as last month, VinFast officials said the company was working to select subcontractors for the North Carolina site, which Chatham County required to release a significant building permit. In March 2022, VinFast received an incentive grant from the state to create 7,500 jobs and invest $4 billion in the factory. As part of the agreement, the automaker had pledged to create at least 1,997 new jobs by the end of this year.

VinFast would have received up to $1.25 billion in state and county benefits had it meet its initial goals.

Both North Carolina and Chatham County have some protections on their incentive packages if VinFast falls short. The $316 million job development investment grant North Carolina awarded will only distributed as the company meets annual hiring and investment targets. And North Carolina has clawback provisions for the $125 million in upfront site expense reimbursements it provided should VinFast default. If the EV maker ultimately creates fewer than 3,875 jobs, the state can retrieve 100% of this reimbursement.

Chatham also has a recapture mechanism for its two main incentive grants.

The state has already spent some public money on the project. As of Feb. 1, the North Carolina Department of Transportation had distributed a little over $18 million to improve infrastructure around the land, and the state had also given $15.6 million for the city of Sanford to improve water and sewer to accommodate VinFast operations.

VinFast’s new delay will present North Carolina leaders with a choice; in November 2022, the North Carolina Department of Commerce entered a purchase option agreement with VinFast, which gave the state the right to buy all or parts of the company’s 1,765-acre site should the automaker miss concrete hiring and construction deadlines. One of those deadlines was for VinFast to commence operations by July 1, 2026.

VinFast looks toward other markets

In a statement Saturday, VinFast said the North Carolina delay is “part of its prudent expansion plan.”

“This decision will allow the Company to optimize its capital allocation and manage its short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations,” the company said.

Poor initial reviews, paltry sales, and steep loses have hounded the seven-year-old company since it brought its first electric model to North America last year. North Carolina was to be home to VinFast’s first international factory, but in recent months, the company has committed to opening factories in India and Indonesia on a faster timeline.

VinFast chairwoman Le Thi Thu Thuy said the automaker has “adopted a more prudent outlook that is carefully calibrated to near-term headwinds.”

The company is owned by billionaire Pham Nhat Vuong, Vietnam’s wealthiest person. In an interview last month, Vuong told Bloomberg he will continue to invest in VinFast “until I run out of money.”

The automaker Saturday said it expects to deliver around 80,000 cars in 2024, more than double its total from last year. To this point, VinFast has completed most of its electric vehicle sales to Green and Smart Mobility, a Vietnamese taxi service controlled by VinFast’s parent company Vingroup.

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