North Carolina officials say they gave VinFast several opportunities — and ample time — to meet deadlines outlined in an agreement tied to a promised factory. But when the plant failed to come out of the ground, Attorney General Jeff Jackson said Friday, the state had no choice but to take the Vietnamese automaker to court.
“We had a deal and they broke the deal,” Jackson told reporters Friday at a Walmart store in Roxboro, where he was promoting a food-assistance program.
Other WRAL Top Stories
Jackson sued the electric-vehicle manufacturer Thursday on behalf of the state Department of Commerce in an effort to reclaim the Chatham County land on which the company plans to build a massive factory. The state says it wants to move on from the delayed project to free it up for future economic development opportunities.
The lawsuit underscores the state’s desire to regain control of land it sees as a valuable — and scarce — tool to attract companies that might be able to bring jobs to the state more quickly than VinFast. The state’s ability to wrest the land back from the company might come down to what a judge considers “vertical construction.”
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.
Eight months after the announcement, VinFast executives agreed to a 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 alleges the company failed to meet construction deadlines and now wants to exercise the option.
A VinFast spokesperson said in a statement late Friday that the company became aware of the lawsuit through media reports. “We will review and provide an official response once we receive all relevant materials from the state,” the company said. It added that recent changes in U.S. policies related to the electric-vehicle industry have affected the project timeline, requiring additional time.
“Construction activities are expected to commence shortly in accordance with the planned schedule,” the VinFast spokesperson said.
In March, the company submitted a plan to resume construction at the facility by the end of the year. According to the lawsuit, the company told state officials earlier this year that it has built footers, wind columns and vertical walls for water basins at the site — things it argues should meet the vertical construction requirement.
Jackson disputed the company’s characterization of its progress, alleging that the company has failed to begin vertical construction. He also alleges that the company is highly unlikely to commence operations by July. The state Department of Justice notified the company in January that it had defaulted on its agreement, and that the state would begin taking steps to get the land back.
The buyback agreement and other commerce documents reviewed by WRAL don’t appear to define “vertical construction.” When asked by WRAL how the state defines vertical construction, Jackson said: “I think that's an argument we're going to leave for the court, rather than in the middle of the Walmart.”
The company and the state have been in contact for months over the matter.
“We had a long back-and-forth with them, and we gave them lots of opportunities to get right by the deal,” Jackson said. “We gave them all the time they needed until they made clear that they were going to breach. Once they sort of made clear that they had crossed the point of no return, that's when we decided to take them to court.”
‘Speed to market’
Central to the deal was $450 million that was appropriated by state lawmakers to support preparation for the site, transportation improvements, and water and sewer infrastructure associated with the project.
State officials are often willing to make such investments in state land — even if there’s a chance a project might fall through. Doing so helps the state preserve marketable land for other economic development projects. State and local economic developers told lawmakers last month that companies continue to consider expansions in North Carolina for major expansions but that sites to accommodate major expansions are scarce.
Jackson said the lawsuit highlights provisions state economic developers build into contracts to protect those kinds of investments. “There are very strong contractual provisions that exist to protect our state and our taxpayers from exactly what happened here,” he said. “That's why we're taking them into court. That's why I'm confident that we're going to prevail.”
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.
VinFast has struggled to expand in the U.S., and it has provided regular updates to investors and regulators about its progress. The company reported as recently as last month that it expects to begin production in Chatham County in 2028. The company said it began construction in July 2023 and that a review of the facility design was ongoing. As of Dec. 31, VinFast had spent $301.2 million on the project, the company said in an April 30 regulatory filing.
It was unclear why the state waited until Thursday to file its lawsuit, considering the state’s contention is that the company breached the agreement in 2024.
Asked if another company was being considered for the VinFast site, Jackson said: “I don't think I can reveal everything there. That's a question for Commerce. I'm the lawyer. Commerce brings these guys in. I sue these guys if they break the deal.”
North Carolina Commerce Secretary Lee Lilley declined to comment.
“North Carolina’s economic development strategy is built on strong partnerships and performance-based agreements that are designed to protect the public interest,” Lilley said in a statement Thursday. “While we remain committed to supporting projects and long-term growth, we also have a responsibility to ensure that contractual obligations tied to taxpayer-supported incentives are fulfilled.”
Large swaths of land are harder to find in this fast-growing state, and across the country. So state and local officials across North Carolina have worked hard to assemble and protect property to prepare turn-key megasites capable of handling major industrial projects. The Chatham site is particularly valuable, given its close proximity to major roads, Raleigh-Durham International Airport and significant clean-energy manufacturing projects in the Triad.
As of last month, North Carolina was competing for about 240 active business recruitment and expansion projects, according to Chris Chung, chief executive of the Economic Development Partnership of North Carolina, who briefed lawmakers last month on corporate recruiting efforts. He said during a legislative oversight committee meeting that his organization has seen a dramatic rise in the number of “mega projects,” which Chung described as expansion deals that are proposing at least $1 billion or more of capital investment.
Many of those projects are also considering sites in other states. And many companies view “speed to market” — how quickly can they begin production — as one of their biggest considerations, he said , adding that the readiness of industrial sites that can cater to those opportunities is critical.
“We want to make sure we aren't in a position where we run out of inventory of ready-to-go sites, because that's a good way to get eliminated from consideration,” Chung told lawmakers.
‘Right there for somebody else’
Even though VinFast has been growing in other international markets — for instance, its revenue more than doubled in Asia in 2025 — it has struggled to grow in the U.S. The company has long warned of risks associated with expanding in the U.S. As early as 2023, the company warned that its success in the U.S. could be hindered by the potential loss of incentives for buyers and manufacturers of electric vehicles.
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. And in a regulatory filing, it warned: “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.”
Legislation signed by Republican President Donald Trump last year ended the $7,500 tax credit. VinFast asked state officials to extend the development timeline after Trump had expressed a desire to end the tax credits. The state denied the extension request.
State and local economic development officials understand the risks associated with large global manufacturing investments, especially in emerging industries. And if VinFast were to cancel its plans in the region, they think they’ll be able to find a replacement quickly.
“Obviously, we wanted them to be where we all expected them to be at this point, and they're not,” Michael Smith, the president of the Chatham County Economic Development Corp., told WRAL in a March interview. “But the market out there knows Chatham County, North Carolina, much better than they did just a couple of years ago. They saw that we're able to compete with competitive projects and win.”
He also said the site is even more marketable now due to water, road and sewer improvements that were completed for the VinFast project.
“Should VinFast change directions,” he said, “it will be right there for somebody else.”
WRAL State Government Reporter Will Doran contributed to this report.