Pressure is mounting on VinFast Auto Ltd. after two US officials reminded the Vietnamese EV maker of its obligations under a four-year-old deal to build a mammoth plant in North Carolina.
The automaker earlier this week announced plans to resume construction of a Chatham County factory following a two-year delay, but its latest blueprint calls for about 1,400 workers, around 80% fewer than originally promised, said Michael Smith, president of the Chatham County Economic Development Corporation. That jeopardizes hundreds of millions of dollars in incentives offered by the state and local government.
"Our incentives both in North Carolina and in Chatham County are performance-based -- you have to agree to provide a number of jobs and investment," Smith said in a phone interview. "Because they haven't done any of those things is the reason we are in the situation we are now."
The lossmaking Vietnamese firm is also facing a deadline to meet certain obligations or risk having the state buy back part of the site in the community of Moncure that was acquired for $44 million in 2022.
"The terms of these agreements have also not been changed, and under the option the company must commence operations on the Moncure site by July 1, 2026," David Rhoades, communications director for the North Carolina Department of Commerce, said in a statement. He didn't say if the state intends to exercise its buyback option.
VinFast declined to comment on possible ramifications of the altered factory plans. "We remain focused on executing the project responsibly and in alignment with our agreements," it said in a statement earlier this week.
VinFast first put its US factory on hold in 2024, the year it was meant to start operations, a date that has now been pushed back to 2028. The outlook has darkened since the deal was inked in 2022, with EV sales in North America forecast to drop 16% this year from 2025, according to BloombergNEF. A flood of cheap Chinese cars has also reshaped the global EV landscape.
The company has indicated it will begin building its North Carolina factory in April, Smith said, adding that further negotiations are expected.
"We support VinFast and we want them to succeed here in Chatham County," Smith said. "We will do what we can do to make that happen."
In 2022, North Carolina rolled out generous incentives topping $1 billion for VinFast Auto Ltd.'s ambitious $2 billion electric vehicle factory. That includes Chatham County assistance of $400 million contingent on the company hiring 7,500 workers and investing $4 billion, The Carolina Journal reported March 17.
The state can buy back all or part of the 1,765-acre factory site if VinFast misses certain hiring or construction milestones -- including a target of 1,750 jobs by the end of 2026 -- according to a real estate agreement. However, if the company invests at least $500 million in the project's main development tract, that portion of the site is shielded from repurchase tied to the 2026 jobs shortfall.
It wasn't supposed to be this way. North Carolina viewed VinFast's commitment as a crowning achievement in its goal to create cutting-edge manufacturing in the Triangle Innovation Point park not far from the capital of Raleigh. At the time, former US President Joe Biden tweeted a White House statement about VinFast's North Carolina plans, which it called a $4 billion investment that would create more than 7,000 jobs.
North Carolina committed $450 million in new infrastructure, including roads, rail, water and sewer systems to the site, according to The Carolina Journal.
State and local governments lined up an incentive package of $315 million over a 32-year period now at risk. VinFast was also offered $125 million to cover site preparation costs if it provided at least 3,875 jobs by Dec. 31, 2026 under a July 2022 development agreement.
But the American electric vehicle market has slowed since US President Donald Trump's administration ceased federal incentives supporting plug-in vehicle purchases.
Still, the EV maker, founded by Vietnam's richest man Phạm Nhật Vượng, is aggressively expanding elsewhere, opening factories in India and Indonesia in a bid to build a global brand.
The strategy is proving costly. The company posted a fourth-quarter net loss of 35.2 trillion dong ($1.3 billion), up 15% from a year earlier. The company noted a $235.6 million expense for the North Carolina factory for the last quarter of 2025.