VW still hesitant about Eastern European battery factory

Despite pressure from the Czech government, Volkswagen still does not want to decide on a location for a possible new battery cell factory in Eastern Europe. The Czech Republic is threatening to promote battery projects of other companies instead.

volkswagen-id-meb-batterie-battery-braunschweig-2019-02-min — Image: Volkswagen

Group CEO Oliver Blume said after a meeting with Czech government leader Petr Fiala that there were no business reasons to decide on further locations in Europe for the time being due to market conditions, including the slower-than-expected ramp-up of BEVs in Europe. Fiala reacted disappointed after the meeting with Blume: “We cannot continue to hold the land for this project.” The country would thus concentrate on other battery projects.

Prague had offered VW the site of the former Pilsen Line military airfield. However, there was local resistance to the planned demolition of the airport and the construction of a new battery factory by VW’s battery division PowerCo.

VW board member Thomas Schmall had said as recently as March that VW itself was in no hurry to make a decision on the location – after the group postponed a decision as early as December 2022, citing high energy prices. However, in spring, it also became known that VW was prioritising its plans for a battery factory in North America – because of the better subsidy conditions there. The factory in North America is now a done deal: as reported, it will be built in St. Thomas, Canada.

VW is currently building a cell factory in Salzgitter, one in Sagunt near Valencia and another factory is to be built together with Northvolt in Sweden. With the Czech Republic’s de facto refusal of funding, the location of the fourth of six planned battery factories is now once again in question. In addition to the Czech Republic, Poland and Hungary have recently been mentioned as possible candidates for the Eastern European location.

It is not known which “other battery projects” Fiala was referring to in his statement. The PowerCo factory would probably have created up to 4,500 jobs. The car industry – above all the, Czech VW subsidiary Skoda – accounts for almost ten per cent of the Czech gross domestic product. Hyundai also operates a vehicle plant in Nosovice in the eastern Czech Republic, and Toyota has a plant in Kolin.

handelsblatt.com (in German), reuters.com