By nishihata @Adobe Stock
Paul Best of the Cato Institute reports that taxpayers are on the hook for a $1.2 billion dollar bet on an EV startup. Best writes:
North Carolina officials announced a long sought‐after victory in early 2022: VinFast, a Vietnamese electric vehicle startup, will invest $4 billion to build a 2,000-acre automotive factory in Chatham County, creating 7,500 jobs for the community as it helps to restore the state to its former industrial glory.
But skepticism grew about the plan as more details were released. The state intends to use eminent domain to purchase and then demolish over two dozen homes, five local businesses, and the century‐old Merry Oaks Baptist Church. Officials announced a bevy of grants and tax breaks for VinFast in the form of a $1.2 billion incentive package, courtesy of taxpayers. VinFast went public by merging with a special purpose acquisition company last August, opening at $10 a share and quickly running up to $93 before falling hard back to earth. Shares closed at about $2.40 on April 22.
And while the electric vehicle market was still buzzing in early 2022, optimism for the industry’s outlook had dipped sharply by the time VinFast actually broke ground in summer 2023. It doesn’t help that VinFast has burned through $5.8 billion over the last three years as it vies to gain traction in the cutthroat industry. […]
Since publishing this story, local news outlets reported that construction has stalled as VinFast seeks permit approval for a new factory design. Two law firms also just filed a class action lawsuit against VinFast on behalf of shareholders who allege that the company overstated the strength of its business and made other misleading statements. A VinFast spokesperson said that the allegations in the lawsuit are “not accurate.”
Read more here.
