Automotive News Europe — 2023-11-01
Automotive Industry
Volkswagen Group will not make a decision on a fourth battery factory site for now, with demand for electric vehicles in Europe lagging expectations, CEO Oliver Blume said.
"Based on market conditions, including the sluggish ramp up of the BEV market in Europe ... there is for the time being no business rationale for deciding on further sites," Blume said in a statement provided by VW Group's Czech unit Skoda.
VW Group has been looking at a possible site for a gigafactory for electric car batteries in eastern Europe and had already put off a decision a year ago when it was considering locations in the Czech Republic, Hungary, Poland or Slovakia. It said earlier this year it was in no rush to make a decision.
The Czech Republic has pushed for the deal as it seeks to secure the future of its all-important car sector as the global vehicle industry moves shifts away from fossil fuels.
Blume met Czech officials this week as the country has pushed for the investment as it seeks to secure the future of its all-important car sector while the global vehicle industry shifts away from fossil fuels.
Czech officials said on Wednesday they would start offering their proposed site for VW's battery plant to other investors, saying they could not afford to wait any longer for a decision.
Prime Minister Petr Fiala said the country would begin concentrating on other projects. "We cannot continue to hold the land for this project," Fiala told a news conference.
Industry minister Jozef Sikela said talks were happening with five investors, with two of those projects on a similar scale to VW's plans.
VW has previously announced plans to open six gigafactories by 2030 and has already selected sites in Salzgitter, Germany; Valencia, Spain; and St. Thomas, Canada. Blume said these three locations had production potential of up to 200 GWh per year.
VW joined automakers and analysts warning last week that demand for EVs is not developing as expected, with the German group's own order book for EVs down to 150,000 in Europe from 300,000 last year.
VW said it remained committed to e-mobility, including at Skoda, which is the Czech Republic's biggest exporter and is rolling out new electric models.