Incentives package worth $1.2 billion draws electric car plant to NC
By Theresa Opeka, Carolina Journal
A Vietnamese automaker has announced plans to build a $4 billion electric-vehicle assembly and battery-manufacturing plant at Triangle Innovation Point in Moncure, about 30 miles west of the Triangle. To attract the newly formed company, the state and Chatham County promise to spend nearly $1.2 billion in incentives over the next 32 years. Meantime, VinFast is working to secure $1 billion in investment money to build the plant.
Using the state's Transformative Job Development and Investment Grant program, VinFast could get up to $316.1 million in reimbursement from the state over three decades if the company meets hiring goals. The state is spending another $450 million on infrastructure around the site. The total state appropriation is estimated at $766 million, with Chatham County giving VinFast another $400-million incentive package.
The announcement was made Tuesday, March 29 at the Raleigh Convention Center by Gov. Roy Cooper and Le Thi Thu Thuy, Vingroup vice-chair and VinFast Global CEO. Vingroup JSC is reportedly shopping plans to potentially secure investor funding by offering equity or stock in the company in exchange for between $500 million and $1 billion for expansion into the U.S.
“North Carolina is quickly becoming the center of our country’s emerging, clean-energy economy,” said Cooper, a Democrat. “VinFast’s transformative project will bring many good jobs to our state, along with a healthier environment as more electric vehicles take to the road to help us reduce greenhouse gas emissions.”
VinFast, a subsidiary of VinGroup, has headquarters in Hanoi. State officials involved in securing the plant say the company will grow the state’s economy by at least $71.59 billion over 32 years, but it's likely the company won't pay state corporate income tax during most of that time. According to the state budget signed into law in November, the state is scheduled to phase out the corporate tax by 2029.
VinFast says its goal is to create 7,500 jobs at the Chatham County plant, with an average salary of $51,096. Vinfast was founded in 2017 and is the first Vietnamese car company to expand globally. It selected North Carolina for its first North American plant to build a new line of electric vehicles and batteries. It will also be the state’s first car manufacturing plant.
Construction for Phase 1 of the factory will start in 2022 after the construction permit is granted, and production is expected to start in July 2024. Phase 1 is expected to produce 150,000 vehicles per year. According to the N.C. Department of Commerce, vehicles to be produced at the site include the VinFast VF 9, a seven-passenger all-electric SUV, and the VinFast VF 8, a five-passenger, all-electric mid-size SUV.
“It is fantastic that this manufacturer chose to call North Carolina home," said Paige Terryberry, fiscal policy analyst for the John Locke Foundation. "But Governor Cooper’s handout redirects taxpayer funds, more than $700 million in this case, to this favored project at the expense of the rest of the state. Furthermore, the wasteful incentive package was likely a trivial factor in the manufacturer’s decision to locate here.”
The state’s Economic Investment Committee approved the incentive package earlier this week. VinFast’s JDIG agreement calls for moving as much as $36.6 million into the state’s Industrial Development Fund – Utility Account. The Utility Account helps rural communities anywhere in the state finance necessary infrastructure upgrades to attract business.
“The arrival of Vinfast to North Carolina is great news for our state and for the thousands of North Carolinians who will fill the new jobs created as a result,” said House Speaker Tim Moore, R- Cleveland. “Today’s announcement marks significant investments in infrastructure, transportation, and workforce development.”
The state's promise of $450 million in infrastructure would cover site preparations, road improvements, and additional water and sewer infrastructure.
“Today’s announcement is another example of the continuing growth of North Carolina’s economy fueled by low taxes, a strong workforce, and reasonable regulations,” Senate Leader Phil Berger, R-Rockingham, said. “VinFast’s commitment to North Carolina solidifies our position as a global leader for fostering innovation and supporting businesses.”
VinFast has established global operations in the US, Canada, Germany, France, and the Netherlands. VinFast provides an ecosystem of EV products in its home country of Vietnam, including e-scooters, electric buses, electric cars, charging station systems, and green-energy solutions.
“North Carolina’s strong commitments in building a clean energy economy, fighting climate change, and reducing greenhouse gas emissions in transportation make it an ideal location for VinFast to develop its premium, smart, and environmentally friendly EVs,” Le Thi Thu Thuy said.
The Commerce Department coordinated the recruitment of VinFast, which involved state, regional, and local organizations.
“Automotive assembly plants are incredible engines for economic growth, due to the positive ripple effects they create across a region’s economy,” said Commerce Secretary Machelle Baker Sanders.
Carolina Journal Editor-in-Chief Donna King contributed to this story.
