In a major setback for the electric vehicle industry, North Carolina sues Vietnam’s VinFast over the company’s delayed electric vehicle and battery manufacturing project in Chatham County. State officials allege that the Vietnamese EV maker failed to fulfill commitments tied to a multibillion-dollar investment agreement.
According to North Carolina Attorney General Jeff Jackson, VinFast has allegedly abandoned construction work at the 1,759-acre project site for more than a year. The lawsuit claims the company has defaulted on agreements made with the state when it received approval and incentives for the factory project.
VinFast’s Original Commitment
VinFast first announced the North Carolina factory project in 2022, calling it one of its most ambitious international expansions. The company pledged to invest more than $3 billion in the plant and promised to create around 7,500 jobs in the region.
The facility was expected to produce electric vehicles and batteries with an annual manufacturing capacity of approximately 150,000 vehicles. Initially, VinFast targeted July 1, 2026, for the factory to become operational.
However, the company later delayed the project timeline until 2028, citing market uncertainty and changing conditions in the EV industry.
State Demands $80 Million Repayment
As part of the lawsuit, North Carolina is seeking repayment of nearly $80 million that had been allocated to prepare the project site for development. State officials also want the legal right to reclaim the land and make it available for another manufacturer if VinFast fails to move forward.
The lawsuit states that VinFast’s continued inactivity “all but guarantees imminent further default” under the agreements signed with the state.
This development marks another headline moment as North Carolina sues Vietnam’s VinFast for allegedly failing to deliver on one of the state’s largest EV manufacturing promises.
VinFast Responds to Allegations
VinFast said it had not yet received official legal documentation from North Carolina but insisted that the project had not been abandoned. The company stated that contracts with contractors have already been signed and construction activities are expected to resume soon.
The automaker also explained that recent policy changes in the United States related to the EV industry have affected the project timeline. VinFast said it requires additional time to evaluate the best implementation conditions for the factory.
Financial Challenges Add Pressure
The lawsuit comes during a difficult financial period for VinFast and its parent company, Vingroup. Last week, VinFast announced plans to sell its Vietnamese manufacturing business for approximately $506 million. The investor group involved in the deal is also expected to assume nearly $6.9 billion in debt.
Following the news, shares of Vingroup reportedly fell by 3.5% in Hanoi trading.
As North Carolina sues Vietnam’s VinFast, the case could become a significant test for large-scale EV investment projects in the United States and may influence how future state incentive agreements are structured.
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