(The Center Square) – Nothing speedy would aptly describe North Carolina’s largest single economic development project with Vietnam-headquartered automaker VinFast.
Production won’t happen on schedule this summer. And, pending the scales of its balance sheet, the possibility of never remains in play.
Hailed in late March 2022 for production to start in July 2024, the $2 billion first phase investment grew to a $4 billion electric vehicle factory and the “crown jewel” of the company’s global expansion. According to published reports this week, the automaker has tapped the brakes, at a minimum, which follows news from December when VinFast reduced square footage on the new plant from 995,500 to 782,255.
Permits that allowed groundbreaking in Moncure last July are thusly scrapped, and the new filings are under review. Those won’t be the problem.
Money is, and VinFast is bleeding it. VinFast shares on the NASDAQ have dropped about 30% this week and more than 90% since all-time highs last year. First-quarter financials came out Wednesday.
VinFast generated $300 million in revenue in the first three months and operated at a $422 million loss. Financing costs last quarter were $173 million. Cash on hand entering April was $123 million.
Earlier this month, a federal securities lawsuit was filed against the company. Shareholders say statements have been misleading.
VinFast did have a more than 400% increase on vehicle sales deliveries in the first quarter, to nearly 9,700. Most were in Vietnam. For context, Tesla sells about 1 million per year, with roughly half in America to make it No. 8 among all automakers in the country. VinFast plans to sell about 100,000 this year.
VinFast is estimated to have lost $2 billion in 2023, and more than $4 billion since 2021.
Democratic Gov. Roy Cooper proudly took ownership of the $1.2 billion incentive package to land VinFast. The breakdown is $400 million from Chatham County; $316 million over 32 years in a Job Development Investment Grant; $450 million for site preparation, road improvements, and additional water and sewer infrastructure; $50 million grant from the Golden LEAF Foundation; and $38 million for community college training.
