North Carolina sues Vietnam’s VinFast over delayed EV project

[HANOI] The State of North Carolina has sued Vietnamese electric vehicle maker VinFast for its alleged failure to meet its commitments to build an EV and battery factory in the state, attorney general Jeff Jackson said in a statement.

VinFast has abandoned work on the 712-hectare (1,759-acre) site in Chatham County for over a year, according to the statement issued on Thursday (May 21).

VinFast was earlier licenced to build the plant with commitments to create 7,500 jobs and invest over US$3 billion in North Carolina, the statement said.

“VinFast has defaulted on its agreements with the State, and VinFast’s continued inaction all but guarantees imminent further default,” it said.

VinFast said that it had not yet received any official documentation from the State.

“Contracts with contractors have already been signed, and construction activities are expected to commence shortly in accordance with the planned schedule,” it said in a statement.

In 2022, VinFast said that the plant would have an annual production capacity of 150,000 vehicles. In 2024, it said that it would delay the launch of the plant to 2028 amid market uncertainties.

North Carolina should be allowed to exercise its option to purchase the land for a future manufacturer, and wants to be repaid US$80 million allocated to VinFast for site preparation, the statement said.

VinFast initially targeted to have the factory up and running by Jul 1 this year, but had later said that it could not do so until 2028, according to the statement.

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The EV maker said in the statement that recent changes in US policies related to the EV industry have impacted the project timeline, requiring more time “to evaluate appropriate implementation conditions”.

VinFast announced last week that it will sell its Vietnamese manufacturing business for 13.3 trillion dong (S$645 million) to a group of investors who will also assume roughly US$6.9 billion in debt.

Shares in Vingroup, VinFast’s parent company, fell 3.5 per cent on Friday morning in Hanoi. REUTERS