VinFast Sued by U.S. State Over Stalled Factory Project, Shifts Focus to Indonesia and India

Vietnamese electric vehicle maker VinFast had initially planned to invest $4 billion in building an EV and battery plant in Chatham County, North Carolina, with an annual capacity of 150,000 vehicles. The project promised to create over 6,000 jobs and was expected to begin production by mid-2024. It received approximately $450 million in state and local government subsidies and was touted as the largest economic development project in the state’s history. However, after a groundbreaking ceremony in July 2023, construction made no substantial progress. The production start date has since been repeatedly delayed—now pushed back to 2028—and the promised number of jobs has been drastically reduced. On December 10, 2024, the project’s building permit expired, halting all on-site work and leaving behind large quantities of unused construction materials. In January 2026, North Carolina’s Department of Justice issued a notice of default, stating that VinFast had failed to meet its commitments regarding investment, job creation, and project timelines, and had neither submitted required annual compliance reports nor proposed corrective measures. On May 28 of the same year, the state’s Attorney General filed a lawsuit seeking to reclaim the land and recover $80.2 million in state funds. VinFast responded that its legal counsel was reviewing the matter and that it would respond appropriately in due course. Financially, VinFast’s 2025 financial results, released in early 2026, showed a net loss of $3.9 billion, including a $235.6 million asset impairment charge related to its U.S. factory. The company had already carried out significant layoffs of its U.S. team and faced reports that approximately 27% of its vehicle sales went to affiliated parties. Although other companies have expressed interest in the North Carolina site, VinFast has refused to sell it. Meanwhile, VinFast is shifting its manufacturing focus to India and Indonesia. In Thoothukudi, Tamil Nadu, India, it is building a Phase 1 plant with a capacity of 50,000 vehicles per year using a phased investment model. The facility has already produced 10,000 EVs and plans to expand into electric buses and two-wheelers. In Subang, West Java, Indonesia, an assembly plant with the same annual capacity was completed and began operations within 17 months, accompanied by agreements to develop transportation infrastructure. However, industry analysts remain skeptical about whether VinFast can achieve positive cash flow in Indonesia.