Volkswagen postpones investment in gigafactory
2022.12.09 08:03
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Volkswagen postpones investment in gigafactory
Budrigannews.com – Due to economic uncertainty and high energy costs in the region, Volkswagen AG is postponing its decision regarding where to construct a gigafactory for electric car batteries in eastern Europe beyond 2022.
The Volkswagen AG (OTC:) and PowerCo, the company that makes batteries, are always looking for good locations for their next gigafactory in Europe,” the automaker said in an email on Thursday.
It stated, “There is no pressure to act as we take some additional time to make decisions in light of the current circumstances.” There is currently no impact on the planned construction or production start.”
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In light of the generous green energy subsidies provided to businesses by the Inflation Reduction Act, the European Union is concerned that investment will migrate to the United States. This comes at a time when energy prices in Europe have reached all-time highs and the supply for next year remains uncertain.
In light of the energy landscape in Europe, Sweden’s Northvolt stated in October that it may prioritize expanding its battery plants in the United States over Europe.
Volkswagen (ETR:) participated in an interview on Tuesday. According to Thomas Schaefer, brand chief, the cost of energy in Europe was making it difficult for the automaker to explain to shareholders why it would build a battery plant there.
“We are not in a position under stock corporation law to say we will do it here out of solidarity,” Schaefer stated. “If you have the option of building a battery plant in Europe, where electricity costs 15 cents per kilowatt hour, but you can get it in China or America for 2-3 cents, we are not in a position to say we will do it here.”
He continued, “This is a hot topic, and people frequently underestimate how difficult it is to move forward on it here.”
In accordance with Herbert Diess’s plan to construct six such facilities with partners across Europe by the decade’s end, the eastern European plant would be the fourth.
The Czech Republic, Hungary, Poland, and Slovakia are under consideration.
In October, Volkswagen’s Czech subsidiary Skoda Auto stated that its parent company would decide on the location by the end of 2022.
Nevertheless, Oliver Blume, the new CEO of Volkswagen, is scrutinizing a significant portion of his predecessor’s legacy, rethinking the software strategy of the company, and reassessing which plants produce which models.
It has begun looking for locations in Canada for its first gigafactory outside of Europe.
