Volkswagen postpones decision on Eastern Europe gigafactory | Popgen Tech

PRAGUE/FRANKFURT, Dec 9 (Reuters) – Volkswagen AG ( VOWG_p.DE ) is delaying its decision on where to build a gigafactory for electric car batteries in Eastern Europe beyond 2022, pointing to economic uncertainty and high energy prices in the region .

“Volkswagen AG and its battery company PowerCo are constantly evaluating suitable sites for their next gigafactory in Europe,” the automaker said by email on Thursday.

“There is no pressure to act as we are still taking time to make a decision in light of current circumstances,” the statement said. “At the moment there is no impact on planned start of construction or start of production.”

The European Union fears an exodus of investment to the United States in light of generous green energy subsidies offered to companies under the Inflation Reduction Act, just as energy prices in Europe hit record highs with next year’s supply still uncertain.

Sweden’s Northvolt said in October that it may prioritize expanding its battery plants in the United States over Europe in light of Europe’s energy landscape.

Thomas Schaefer, head of Volkswagen’s brand, said in an interview on Tuesday that Europe’s energy prices make it difficult to justify to shareholders why the automaker would build a battery plant there.

“If you have the option to build 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 under stock corporation law to say not we will do it here out of solidarity,” Schaefer said.

“This is a red-hot topic and people often underestimate how complex it is to move forward here,” he added.

The Eastern European plant would be the fourth under a plan by former CEO Herbert Diess to build six such sites with partners across Europe by the end of the decade.

Locations under consideration include the Czech Republic, Hungary, Poland and Slovakia.

Skoda Auto, Volkswagen’s Czech unit, said in October it expected its parent to make a decision on the location by the end of 2022.

Still, Volkswagen’s new leader, Oliver Blume, is putting much of his predecessor’s legacy under scrutiny, reviewing the company’s software strategy and reevaluating which plants make which models.

It has begun scouting sites for its first gigafactory outside of Europe in Canada.

Reporting by Robert Muller, Christoph Steitz, Victoria Waldersee; Editing by Bill Berkrot and Mark Potter

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