Electric-vehicle maker VinFast is fighting the North Carolina government’s efforts to claw back a Chatham County megasite, arguing in a new legal brief that the state’s actions are compounding delays on a multibillion-dollar factory while denying allegations that it violated its end of the bargain in one of the biggest economic development bets in state history.
Attorney General Jeff Jackson sued the Vietnamese automaker in May on behalf of the state Department of Commerce, alleging that the company missed a key contractual development deadline, triggering a buyback clause in the original sale agreement. State officials say they want to move on from the VinFast project to free up the land with the hopes of recruiting another company.
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But VinFast, in its newly filed lawsuit response, says the state’s lawsuit is premature and that it’s still making good on its deal with economic developers. It wants a judge to affirm that position, throw out the state’s lawsuit and award compensation for damages it says were caused by the state. VinFast alleges that the state’s actions have hurt the company’s ability to obtain and maintain financing for the project, resulting in more delays and increased costs — barriers to meeting elements of its deal with the state.
“The state cannot rely on the absence of completed financing, additional construction spending, or related milestones to avoid its obligations … to the extent the state's own failure to cooperate prevented or materially hindered VinFast from satisfying those conditions,” the company wrote in its 80-page response, which was filed in state court this month.
A spokesperson for the state Department of Justice, which is suing on behalf of the North Carolina Department of Commerce, declined to comment because the litigation is ongoing.
VinFast in March 2022 announced plans to invest more than $2 billion and create 7,500 jobs at the Chatham County site. At the time, it expected to begin construction that year and begin production by the middle of 2024.
VinFast’s plans were initially projected to grow the state’s economy by up to $71.59 billion over 32 years. The state agreed to a job-creation grant that would provide up to $316.1 million to the company in tax reimbursements over that span, provided it meets hiring and investment targets. So far, none of that proposed grant money has been paid out to the company.
Eight months after the announcement of VinFast’s plans, company executives agreed to the land-buyback deal. It gives the state the option to buy the property it originally sold to VinFast if the company failed to begin vertical construction by Jan. 1, 2024, or commence operations by July 1, 2026.
The state’s lawsuit, filed before the July deadline, focuses on vertical construction. The company and the state disagree over whether that has happened. The answer could factor into a judge’s decision over how to rule.
Vinfast says it completed the vertical construction obligation on time by pouring concrete into building footers — foundation work that’s typically measured in inches, not in stories — and that it has also built some retaining walls on site.
But the company is far from completing a project that would enable production at the site, which sits in a prime location: Off U.S. 1 in Moncure, just south of the Wake-Chatham county line. The state argues that vertical construction hasn’t begun. Separately, Chatham County officials voted in June to cancel their own incentives deal with the company, saying VinFast failed to meet project deadlines.
VinFast says it’s still trying to get up and running — and that other key deadlines tied to its deal with the state still haven’t passed. Therefore, it argues, the state’s lawsuit is premature.
The company has until Dec. 31, 2026 to create at least 1,750 jobs and make a “material investment” of at least $500 million in the site. VinFast says it has already invested about $229 million in the site, noting that meeting the investment target is feasible.
“The state's claim rests not on any positive, unequivocal statement by VinFast that it will not perform, but on [the state’s] own prediction that a delayed operational timeline will necessarily result in a future failure to meet the job-creation benchmark or an inability to meet the ‘material investment’ alternative,” the company said in its court filing.
Vinfast’s legal brief denies many other allegations lodged against it in relation to its efforts to get permits and otherwise clear bureaucratic hurdles necessary to build and start operating a factory. The company acknowledges that it doesn’t have plans to begin construction until 2028. But it says it still intends to build and that it has communicated that to the state.
“VinFast has never communicated to the state, in writing or otherwise, that it does
not intend to build a manufacturing facility on the site,” the company said in its brief. “In fact, VinFast has steadfastly communicated its position to the state that it wishes to perform under its obligations.”
The VinFast project was a key piece of former Gov. Roy Cooper’s economic development strategy. Cooper sought to recruit clean-tech companies that offered a dual benefit of helping the economy and the environment. Some projects, such as Toyota’s massive electric vehicle battery factory south of Greensboro, have been successful. Others have pulled out.
Softness in the EV market in the U.S. has complicated VinFast’s efforts. The company had warned investors of regulatory risks years ago, saying in a regulatory filing: “If current tax incentives are not available in the future, demand for EVs may stagnate or decline, which could adversely affect our business, financial condition, results of operations, cash flows and prospects.”
The Inflation Reduction Act of 2022, approved under Democratic President Joe Biden, offered buyers of EVs a $7,500 tax credit, provided a certain percentage of the vehicle was manufactured or assembled in the U.S. VinFast was hoping its North Carolina plant would have helped U.S. customers qualify for the credit. Republican President Donald Trump last year ended the $7,500 tax credit after vowing to do so in 2024. VinFast cited market factors as a reason to adjust its timeline in Chatham County.
“The decision is necessary given the well-publicized slowdown in the EV marketplace,” the company wrote in a 2024 letter to state economic development officials announcing its plans to delay construction until 2028 — a letter it quoted in the new court reply as well.