How Vinfast's billion-dollar bet on a US factory backfired

Originally published on Nikkei Asia (May 30, 2026)

NEW YORK -- A massive U.S. auto factory producing Vinfast electric vehicles was set to open and begin operating by July 2026 in Chatham County, North Carolina.

Instead, what was described by a company executive as the "crown jewel of Vinfast's global expansion" during the groundbreaking ceremony is nowhere to be seen.

Construction of the facility came to a halt after the EV maker's building permit expired on Dec. 10, 2024. Piles of unused construction material now sit at the entrance of the 1,811-acre empty plot just southwest of North Carolina's state capital of Raleigh. No buildings have risen.

North Carolina sued the firm last Thursday to reclaim the land and claw back the $80.2 million of state taxpayers' money that was used for roadwork and site preparation after Vinfast failed to meet several deadlines, job objectives and investment commitments outlined in the agreement.

"We had a deal and they broke the deal," North Carolina Attorney General Jeff Jackson told reporters a day after the state filed the lawsuit.

"We have recently received the complaint from the State of North Carolina. Our legal counsel is currently reviewing the relevant matters, and we will provide an appropriate response in due course," Vinfast said in an emailed statement.

When the Hanoi-based automaker announced in 2022 it would commit to invest more than $4 billion over four years to build an electric vehicle and battery factory and create more than 6,000 local jobs, the state called it an "incredible engine for economic growth."

The company failed to meet its first major contractual milestone and begin vertical construction of buildings by Jan. 1, 2024, the state alleges, and will not be able to honor its commitment to create 1,750 jobs at the end of this year. Internally, some employees had already reached that conclusion two years ago.

"If you're an employee, you're thinking to yourself, this [project] is unrealistic," a former senior employee, who declined to be named due to confidentiality reasons, told Nikkei Asia.

The company faced financial difficulties and mounting losses in 2024 and layoffs swept through the U.S. team, impacting the human resources and financing departments. Amid global inflationary pressures, financing construction for the project became difficult. Vinfast did not respond to multiple requests for comment on the job terminations. In June 2024, Clayco, a construction company, terminated its contract with Vinfast, according to the legal filing.

A month later, the company publicly delayed the plant's opening until 2028, despite private objections from the state government.

"There was no official statement from the company headquarters, so no one was going to tell anyone external, like government or supplier or any other partner, certainly not the state of North Carolina, that we're not building the plant anymore," the former senior employee said, adding that two years ago there was already a recognition among the U.S. team that many commitments made by the company were unlikely to be met.

By March of this year, the company submitted new plans to Chatham County to reduce the building size and lowered employment projections, while announcing publicly that it intended to resume construction.

Vinfast also floated plans to move its headquarters to North Carolina and build a new research and development center -- a suggestion unlikely to materialize with no researchers in the U.S. and a cutback on researchers in Vietnam, according to the former employee.

While negotiations with the state continued, Vinfast moved ahead elsewhere. The company began producing cars in India and broke ground for a $200 million EV assembly plant in Indonesia.

"It feels like the company was leading the state on," said a person familiar with the discussions between Vinfast and the state. The person declined to be named due to the sensitivity of the matter.

The North Carolina site has attracted interest from several companies. One company made an offer to purchase the land, according to the person, but Vinfast ultimately declined.

North Carolina could have exercised its right to take over the site, which is split into three parcels, in December 2025, after Vinfast stopped construction for 12 consecutive months, according to provisions in the land buyback agreement.

North Carolina Commerce Secretary Lee Lilley told Nikkei Asia in an interview in April that the government was keen to see "large-scale economic activity" at the site.

"We'll want to make sure that whatever happens there is generating that economic activity," he said. "That's where we'll have to talk with all the actors to ensure that we have sufficient activity there to justify the taxpayers' investment."

The collapse is especially painful for a state that has spent decades courting automakers. North Carolina lost a Toyota-Mazda assembly factory to Alabama in 2018 and a $5.5 billion Hyundai mega plant to Georgia in 2022.

The Vietnamese carmaker had been drawn to the U.S. by federal incentives that encouraged American-made electric vehicles under Democratic President Joe Biden's Inflation Reduction Act of 2022. The company had also been in talks to set up in Georgia, according to its application for the North Carolina investment grant.

North Carolina went further than usual in vetting Vinfast, requesting background information on the company from the U.S. embassy in Hanoi, a person familiar with the process said. It was an unusual step that reflected the difficulty of assessing an overseas startup.

"Typically it's not to that point of due diligence," the person said. "It's very tough for us when we're working with a startup from overseas."

Even with heightened scrutiny, critics say the state moved too quickly and the megaproject was politically opportunistic.

Scott Lincicome, Cato Institute vice president of general economics, said that while federal policies under Biden encouraged clean technology and electric vehicles in the country, much of that was reversed when President Donald Trump was elected in November 2024.

"Markets change in ways that you can't predict," he said. "They happen because policy also changes."

Trump ended the $7,500 tax credit offered to electric vehicle buyers last year. VinFast asked state officials to extend the development timeline after the president expressed a desire to end the incentives.

Lincicome added that it would be unlikely for the state to be able to recover the $80 million from the company because of its financial difficulties.

The automaker, which is one of the fastest growing brands in Southeast Asia, reported a record net loss of $3.87 billion in 2025 and has now accumulated $9 billion in losses over the past three years. The company restructured its operations, shifting $7 billion worth of debt off its books earlier this month.

"This is a really high value parcel of land that has now sat empty for four years, and the opportunity costs, the amount of resources that were devoted to this project, you can never get those back," Lincicome said.