Construction is on hold at VinFast’s proposed $4 billion electric vehicle factory in Moncure, Chatham County, after the electric vehicle maker revised its plans for a scaled-down version of the facility.
In July, the county’s central permitting and inspections department issued a foundation permit for the general assembly building. The company broke ground the same month on the planned 995,500-square-foot building, viewed at the time as “crown jewel of VinFast’s global expansion.” Officials said that 7,500 jobs would be created and 150,000 vehicles per year could be built in Phase 1 of the project.
But those plans changed in December.
“In December 2023, VinFast submitted revised foundation plans that changed the footprint and square footage to 782,255,” Kara Lusk, public information officer for Chatham County, said in an emailed statement to Carolina Journal. “This permit is currently under review. No construction is being done until this permit revision is issued.”
With a change in infrastructure, have plans also changed to reduce the number of jobs or money invested?
“VinFast has not made us aware of any changes in their capital investment or job creation numbers of about 7,500,” Lusk told CJ in the email. CJ reached out to Jeff Holland, VinFast’s director of communications, but did not hear back prior to publication.
Lusk said they are currently reviewing a permit application for the 850,564-square-foot body shop building and a separate trade permit application for onsite water and sewer.
The permitting and inspections department, she said, has issued several permits for retaining walls, which are under construction, and also issued trade permits for generators. Additionally, a related permit has been issued for a Sanford pump station that will serve VinFast.
The company first announced plans in February 2022 to build on the 1,800-acre site. The plant was scheduled to open in 2024, but was delayed until 2025. The current delay in construction may push back the opening even further.
In addition to the assembly plant and body shop, a press shop, central energy plant, paint shop, guard house, pump house, and waste building are also scheduled to be built.
The company reported on Wednesday that first-quarter revenue rose 269.7% year-over-year to $302.6 million. The growth was driven by new campaigns like the expansion of VinFast’s dealership network in the US and customer interest in new electric car models.
Deliveries rose 444% from a year ago to nearly 9,700 vehicles, with most sales being recorded in VinFast’s home country of Vietnam.
VinFast’s gross loss in the first quarter was $150.8 million, while gross margin improved from negative (172.9%) in the first quarter of 2023 to negative (49.8%) in the first quarter of 2024.
Despite the improvements on the balance sheet, many questions still surround the company, even more so now with the delay in construction in the Tar Heel State.
The company has lost billions of dollars since 2021, despite such actions as a company merger with Black Spade Acquisition Company in August, which helped value the company at approximately $27 billion with an equity value of $23 billion.
The merger may have been more trouble than it was worth, however, as two law firms jointly filed a federal securities class action lawsuit on April 12 against the company on behalf of shareholders who allegedly say VinFast’s misleading statements caused them to suffer financially due to securities fraud.
The statements, according to the lawsuit filed by New York City firms Pomerantz LLP and Bronstein and Gewirtz & Grossman LLC, include the amount of funding needed to expand the company’s operations and an overestimation of how many vehicles would be delivered by the company last year.
Originally, VinFast offered a small percentage of its tradeable shares, which drove the price to nearly $100 a share in late August. But, the artificially high rate balloon was eventually deflated, as most SPAC mergers fail.
According to the Yale Journal on Regulation, special purpose acquisition companies, or “SPACs,” have delivered poor post-merger returns to shareholders for many years.
On Wednesday, a VinFast share could be bought for $2.62, its lowest valuation since trading began last August.
Under federal law, VinFast shareholders have 90 days to make their claim as a lead plaintiff.
Vinfast also sold 11,300 vehicles during the first half of 2023. The rub? More than half, 7,100, were sold to itself.
Last year, the company was also accused of polluting waterways near the Moncure site. Those waterways include the Haw River, which flows into Jordan Lake; Shaddox Creek, which is the last tributary to the Haw River, before it joins the Deep River to form the Cape Fear River; and Gulf Creek, which goes into Cape Fear.
The Haw River supplies drinking water to Pittsboro. Jordan Lake provides much of Wake County and some of Chatham County. The drinking water in the area of the Cape Fear River that would be affected is between Sanford and Fayetteville.
There has also been criticism of the eminent domain powers leveraged for the EV maker’s Moncure construction site.
Merry Oaks Baptist Church, which has stood on the border between Moncure and New Hill, on the corner of Old U.S. 1 and New Elam Church Road, since 1888, along with three businesses and eleven homes, were scheduled to be relocated for a new highway that is needed for access in and out of the site for Phase 1 of the project. Phase 2 is estimated to impact an additional two businesses and 16 homes.
To attract the company, the state and Chatham County committed to spending nearly $1.2 billion in incentives over the next 32 years.
Using the state’s Transformative Job Development and Investment Grant program (JDIG), VinFast could get up to $316.1 million in reimbursement from the state over three decades if the company meets hiring goals.
The JDIG program has had a terrible track record, with many companies pulling out of agreements they have had with the state, the most recent being BioAgilytix Labs, LLC, pulling out of its agreement in March.
The total state appropriation for VinFast is estimated at $766 million, with Chatham County giving VinFast another $400 million incentives.
Editor’s note: This story has been updated.