Environment and Energy

VinFast’s Potential Delay of EV Plant: Impacts on North Carolina

The Mekong ASEAN

Vietnamese carmaker VinFast is considering further postponing the construction of a planned $4 billion factory in Chatham County, North Carolina, potentially jeopardizing thousands of anticipated jobs in the state’s clean energy sector.

Vietnamese car manufacturer VinFast announced plans in March 2022 to build a new EV manufacturing facility in Chatham County, North Carolina, to produce both electric vehicles (EVs) and EV batteries. VinFast anticipates the $4 billion facility to contribute around 75,000 jobs to North Carolina’s renewable energy sector over the course of the next five years.

The $1.2 billion incentive package awarded to VinFast is one of numerous state- and local-level financial incentives to bring EV manufacturing to North Carolina. The state has made strides to establish itself as a major player in the growing “Battery Belt,” a swath of the US Southeast which has increasingly hosted facilities manufacturing EV batteries. Such financial incentives support the state’s efforts to increase the number of jobs in the renewable energy sector, which will in turn support North Carolina’s ambitious goal to reduce electric power sector greenhouse gas emissions by 70% below its 2005 levels by 2030 and attain carbon neutrality by 2050.

However, last month, a Reuters report revealed VinFast might further postpone the facility’s operation start date. VinFast began construction on the facility in July 2023, but has since revised the construction timeline, delaying operation plans from July 2024 to 2025, and decreasing the factory size as compared to the 2023 plans. The continued delays reflect VinFast’s challenges in entering the US market, which include after-tax losses in both 2022 and 2023 and multiple investigations into VinFast car safety and patent violations.

Ongoing delays in operation plans could impact many North Carolinians as tens of thousands of jobs originally anticipated to enter the market in 2024 face subsequent delays. The anticipated positions at the VinFast facility make up a large share of North Carolina’s clean energy jobs. As of 2022, North Carolina’s clean vehicle sector hosted 9,049 jobs, only 2,593 of which were positions specifically in the electric vehicle sector.

After facing widespread economic downturn during the COVID-19 pandemic, North Carolina hoped that renewable energy positions, particularly those in rural areas such as Chatham County, could provide a pathway towards rebuilding the state’s economy. The North Carolina facility is likewise an important factor in VinFast’s efforts to grow overseas, as VinFast must currently import EVs purchased in the US from its domestic production sites in Vietnam.

While VinFast faces continued challenges in expanding into the US market, ongoing construction of the facility up to now holds promise for both parties as North Carolina strives to grow its clean energy sector and VinFast aims to grow its overseas market. Continued commitment from VinFast is needed to ensure North Carolina’s position as a major player in the US Battery Belt and support the state’s economy through clean jobs expansion.

Alana Ballagh is a Summer 2024 Young Professional at the East-West Center in Washington. She is an incoming graduate student at the University of California, Berkeley, Energy and Resources Group (ERG) pursuing a MS in Energy and Resources with a regional focus on Southeast Asia.