Vietnamese carmaker selects NC for its multibillion-dollar US manufacturing site
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VinFast in NC
Vietnamese automaker VinFast announced in March 2022 that it would open an electric vehicle assembly plant in North Carolina. The battery manufacturing plant will be built in Chatham County and is expected to eventually create 7,500 jobs. It’s the largest economic development announcement in the state’s history. Here is coverage from The News & Observer about the plans.
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VinFast, a nascent automotive company from Vietnam, will build a multibillion-dollar production facility in the Triangle area for its new line of electric vehicles, North Carolina’s Commerce Department confirmed Tuesday.
The startup automaker will build a manufacturing plant at Triangle Innovation Point, a 2,150-acre “megasite” in Moncure. The unincorporated community in Chatham County is a 30-minute drive south from downtown Raleigh.
VinFast plans to build 200,000 or more vehicles a year at the plant, starting with the company’s five-passenger VF 8 mid-sized SUV and seven-passenger VF 9 full-size SUV. The site will eventually produce battery packs as well.
VinFast is expected to invest more than $4 billion in the plant, which it says will employ at least 7,500 workers by 2027. The jobs will have a minimum average wage of $51,096.
“This will create opportunities for engineers, technicians and numerous production positions,” Gov. Roy Cooper said Tuesday. “But that is just the start as we anticipate this facility will draw vendors and suppliers from far and wide.”
Cooper was joined by legislative leaders, Vietnam’s ambassador to the United States and VinFast’s CEO to announce the plant at a ceremony outside the Raleigh Convention Center.
Ambassador Nguyen Quoc Dzung said VinFast’s parent company, Vingroup, was the pride of Vietnam and that the company’s decision to locate in North Carolina had shown how far the country has come.
“Twenty-seven years after normalization, the Vietnam-U.S. relations have grown by leaps and bounds,” Dzung said. “Starting with the cooperation to address war legacy issues, Vietnam and the U.S. have now become strong partners in all areas.... Today’s event is an outcome of this journey.”
The Commerce Department said VinFast looked at 29 sites in 12 states before narrowing the list down to Moncure and a site near Savannah, Georgia. VinFast CEO Le Thi Thu Thuy said the deal came together quickly.
“After like three weeks of negotiations and hard work by both Vingroup and VinFast teams and the governor’s office, we have finally reached the stage today,” Thuy said.
Thuy said the company hoped to begin producing SUVs in Moncure by July 2024.
If it meets hiring goals, VinFast will get a state incentives package worth $854 million over 32 years. Chatham County will chip in another $400 million, bringing the total incentive package to more than $1.25 billion.
By comparison, when Apple announced in 2021 that it would build a campus in the Triangle, it received a state incentive package of $845.8 million, with local incentives bringing the total to just under $1 billion, The News & Observer reported. Apple is expected to invest $1 billion in the state, creating 3,000 jobs with an average salary of $187,000.
No one mentioned tax breaks or incentives at Tuesday’s ceremony. Instead, they cited North Carolina’s workforce, business climate and quality of life.
“Today’s announcement is just another example of the unprecedented growth in North Carolina’s economy, fueled by low taxes, a strong workforce and reasonable regulations,” said Phil Berger, leader of the N.C. Senate. “Businesses small and large are finding a home right here in North Carolina.”
To those, Cooper added North Carolina’s commitment to clean energy, citing in particular his most recent executive order that sets a goal for having 1.25 million zero emission vehicles registered in the state by 2030.
“Now some of them will be made right here in our state,” Cooper said. “For decades, North Carolina has sought to bring auto manufacturing to our state. Well now, it’s coming on the wave of clean energy, and it’s been worth the wait.”
Mike Walden, an economics professor at N.C. State University, estimates VinFast will contribute $71.6 billion to North Carolina’s gross domestic product from the start of the state’s grant term until its conclusion in 2055. Net state revenue will total an estimated $597 million, according to Walden.
VinFast’s short history of building cars
VinFast launched its first line of vehicles — gasoline-powered cars with BMW-licensed engines — in 2019. So far, the company has only operated in Vietnam.
The automaker was founded in 2017 by Pham Nhat Vuong, a Vietnamese billionaire. He is chairman of VinFast’s parent company, Vingroup, the largest conglomerate in Vietnam.
Vuong announced in late 2020 that he would back VinFast’s global ambitions with $2 billion of his personal fortune, according to Bloomberg.
Last year, VinFast announced it would headquarter U.S. operations from Los Angeles, but had not secured a location for its North American production facility.
After a poor sales year, VinFast said in January it would cease production of gas-powered autos by the end of 2022, prioritizing a new line of electric SUVs. The company reportedly lost more than $1 billion on its gasoline vehicles in 2021, according to Nikkei Asia.
A trend of risky bets?
VinFast is the second fledgling company to secure ambitious investments from North Carolina in the last few months.
In February, the state and Guilford County approved an incentive package worth $121.5 million for Boom Supersonic, an aviation startup with plans to revive supersonic passenger travel. The company has yet to build its hallmark product, the Overture jet, a 205-foot passenger plane that is supposed to be able to travel at more than 1,300 mph, faster than the speed of sound and twice the speed of today’s fastest airliners.
Boom is building a $500 million “flagship” production facility at Greensboro’s Piedmont Triad International Airport that will employ up to 1,761 workers earning an average salary of $68,792 per year.
Should Boom or VinFast fail to meet their production or employment goals, North Carolina maintains the right to rescind promised incentives and reclaim leased properties, according to Mike Smith, president of Chatham County’s Economic Development Corporation.
“All entities are protected,” he said. “If they didn’t do what they said they were going to do, we’d be able to get the site back and somebody else would be able to go there. We’re not in a situation where if they go there and don’t do what they say they’re going to do, then all of a sudden they have control of the site and we don’t.”
Cooper said North Carolina is hedged against most financial setbacks if VinFast underperforms, but that state leaders would not have pursued the company without having first “thoroughly evaluated” its prospects.
“We know they’re ambitious,” he told The N&O, “but we’re confident in their capacity for success.”
Can manufacturing lift Moncure’s growth?
Chatham County economic developers and state legislators have worked doggedly to secure a tenant for Triangle Innovation Point, North Carolina’s largest megasite, since missing out on recruiting Micron — a prominent producer of semiconductors — in January. Global interest earned the small-town site a place on The N&O’s list of “5 places to watch in 2022.”
“I’ve been in economic development in North Carolina for more than 20 years, and I don’t think there’s ever been a time where so many transformational projects are looking at North Carolina,” Chatham EDC president Michael Smith previously told The N&O.
VinFast says it will use 1,977 acres of the megasite, which is off old U.S. 1. The site’s proximity to the Triangle — about a 30-minute drive by car — and its robust infrastructure positioned the site as a leading contender for large-scale operations in life sciences, technology and industry.
“What’s going on at Triangle Innovation Point is really well-situated to land top-notch users that will bring great jobs,” said Jason Kaplan, managing member of Moncure Holdings LLC, in a previous interview with The N&O. Moncure Holdings oversees TIP’s development.
“Everything is working for it — TIP’s proximity to Raleigh, RDU, Sanford, U.S. 1. There are very few sites in the country that present the opportunity for major businesses to locate so near a major city.”
This story was originally published March 29, 2022 at 1:05 PM with the headline "Vietnamese carmaker selects NC for its multibillion-dollar US manufacturing site."
