It’s difficult to see what VinFast can possibly say with respect to mounting a legal defence. Though VinFast is still in business, despite mounting losses, so it might be too presumptive to count the company’s North Carolina ambitions out just yet.
North Carolina is suing Vietnamese electric vehicle maker VinFast Auto, alleging it has breached its agreement with the state to build a car factory on a parcel of land in Chatham County.
In its court filing, the state says it is now “impossible” for the firm to meet its July 1, 2026, deadline, arguing VinFast should therefore give the land it had been assigned back, along with US$80 million it had been reimbursed for clearing the site.
For a lot of people, that this project hasn’t worked out is not surprising.
With little experience in car making, let alone electric car making, and a relatively untested product, VinFast had its work cut out for it attempting to enter one of the world’s most developed automobile markets from the get-go.
Perhaps most detrimental to its market entry was its product quality. Its vehicles were not well received, with many reviews arguing that they were far from up to the standard American consumers expect.
This was largely a problem of its own making.
For one, it didn’t have a big presence in Vietnam before entering the US, with estimates it had sold just 7,400 vehicles in 2022. This meant it didn’t have a lot of feedback to work with to improve its product.
Moreover, with feedback it didn’t like, it took a defensive stance, referring at least one YouTuber to the police for a bad review, claiming it contained “untrue content”.
But, of course, that’s not how business works in Western markets, where aggressive responses to criticism are generally seen as commercially counterproductive.
Appearing unwilling to adapt to this vastly different business environment from what it had been used to, that is to take a beat and improve its product before moving ahead, it instead halted work on its North Carolina factory and announced it would be pivoting to Asia.
With three new factories announced in quick succession — one in central Vietnam, another in India, and the third in Indonesia — it was clear that it still intended to expand, just not in the USA.
Whereas this might have been a good time to exit the project altogether, instead it revised its goals down with its planned factory shrinking from a 92,485-square-metre building in December 2023 to 75,261 square metres in 2024, and pushed out its deadline — currently it’s sitting at 2028.
Of course, there is an argument to be made that it was keeping its foot in the door, that if it could get its operations in Asia working and its sales up, it would have already had the groundwork laid for another attempt at the US market.
It’s also kept a hold of that US$80 million it was reimbursed, which could be redeployed elsewhere, though with losses close to US$4 billion in 2025, it’s really just a drop in the bucket.
As it stands, the company has responded to North Carolina’s lawsuit by saying that it had not received anything official and that it would wait for the full details before it makes a public comment.
It’s difficult to see what VinFast can possibly say with respect to mounting a legal defence. Though VinFast is still in business, despite mounting losses, so it might be too presumptive to count the company’s North Carolina ambitions out just yet.