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Saturday, November 9, 2024

State has spent $95.7M on VinFast so far

The state has spent $95.7 million of the $450 million legislators set aside in 2022 to entice Vietnamese company VinFast to build an electric vehicle factory near Moncure in Chatham County.

The budget bill authorized the N.C. Department of Commerce to spend up to $125 million to reimburse VinFast for site work, road work and wetlands mitigation.

Of that, the department’s paid out $51.7 million, spokesman David Rhodes said. He added that the company has until the end of 2026 to seek reimbursements under that part of the deal.

There was another $250 million set aside for Commerce and the N.C. Department of Transportation to upgrade the roads to the factory (much as DOT is doing for the Toyota battery factory near Liberty).

Of that, DOT has spent $28.4 million as of Monday, department spokesman Aaron Moody said.

The remaining $75 million was to become a grant to the city of Sanford to pay for water and sewer upgrades. Of that, $15.6 million has been paid out, Rhodes said.

Those numbers are pertinent because VinFast officials have announced that they’re delaying the intended start of manufacturing at the Moncure facility until 2028.

The postponement is the second VinFast has announced since state officials recruited it — and a potential 7,500 jobs — in 2022.

The company was originally supposed to start making battery-powered SUVs there later this year, but that got put back to 2025.

But given that VinFast is a new entrant in the car-making game, founded in 2017, there’s been skepticism about its ability to deliver. And it’s fair to say that in some quarters — looking at you, Locke Foundation — there are people openly rooting for it to fail.

But in the halls of the Capitol, the general attitude seems to be nothing ventured, nothing gained.

Legacy automakers aren’t building assembly plants in North Carolina because they already have all they need elsewhere in the country, and then some. And if the VinFast project falls through, well, the upgraded Chatham megasite will remain, likely as a top prospect for recruiters.

The interesting thing there is that the state holds a 12-year option on the VinFast site good through 2034 that says it can acquire ownership if the company doesn’t meet its agreed-on schedule and benchmarks.

That wouldn’t come free, as the state would have to pay the lesser of $175 million or VinFast’s purchase and site-prep costs net of any incentives it’s received.

By the way, there’s also a $316.1 million JDIG attached to the project, but none of that has been paid out yet as it’s tied to job-creation and investment targets.

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