Volkswagen: Decision for Gigafactory in Eastern Europe postponed

Volkswagen plans to build six factories for the production of battery cells in electric cars by 2030. But there is fierce wrangling over the locations.

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Volkswagen plans to manufacture a large proportion of its battery cells itself in the coming years. Where, has not yet been fully determined.

(Bild: VW)

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Volkswagen and its battery company PowerCo have not yet made a decision on a location for a possible battery factory in Central Eastern Europe. There is no pressure to act, they said in a statement to Czech media. The evaluation process is ongoing, it said. The roadmap for various regions will be revised in the coming weeks and months, it added. This will have no impact on the planned start of construction and production, it said.

The Czech Republic has offered a former military airfield near Pilsen (Plzen) as a site in the race for the major investment. The Plzen Line airport, with a 1550 meter long concrete runway, was previously still held in strategic reserve by the army. The so-called "Gigafactory" would create around 4500 jobs in battery cell production. The automotive industry contributes almost 10 percent to the Czech gross domestic product.

Klaus Zellmer, Chairman of the Board of Management of Skoda, had stated in October 2022 that he expected a fundamental decision from the Volkswagen Group on the choice of location by the end of the year. Most recently, Poland and Hungary were also mentioned as possible locations. In Europe alone, Volkswagen expects to build six gigafactories by 2030.

However, it is currently uncertain whether this will happen. The negotiations between the USA and the EU are being watched with interest in the industry. The consequences of the planned Inflation Reduction Act are currently being discussed there. With this law, the US government wants to support its own economy with massive subsidies. This also has an impact on location decisions for battery production in Europe. The battery manufacturer Northvolt, for example, had declared that it was basically committed to its plans for a new factory in Schleswig-Holstein. However, it was hinted that the decision would ultimately depend on the price of electricity and subsidies in the USA. In the worst case scenario, there would be a competition for the highest government support - at the expense of taxpayers.

(mfz)