Volkswagen Group has opted to delay the decision on its fourth battery cell factory, citing a less than expected demand for electric vehicles (EVs) in Europe. CEO Oliver Blume expressed that, given the slow growth of the Battery Electric Vehicle (BEV) market in Europe, there is currently no justified business reason to proceed with deciding on additional locations.
The company stopped looking for potential sites in Europe
Previously, the company had paused its decision-making process regarding potential sites in the Czech Republic, Hungary, Poland, and Slovakia. The decision was postponed by a year, and there was no urgency shown earlier this year in making a choice.
A recent meeting between Blume and Czech officials did not seem to result in any progress. The Czech Republic had proposed a site for the battery gigafactory, but with Volkswagen’s indecision, the country’s Prime Minister, Petr Fiala, announced that they could not wait any longer. The proposed site will be offered to other potential investors.
This move by Volkswagen is in contrast to its initial plan to open six battery gigafactories in Europe by 2030 through its PowerCo battery subsidiary. Locations already selected for these gigafactories include Salzgitter, Germany; Valencia, Spain; and St. Thomas, Ontario, Canada. The Salzgitter and Valencia sites are expected to become operational in 2025 and 2026, respectively, with the Ontario site projected to open in 2027.
Interestingly, Europe is Volkswagen’s largest EV market, contributing to over 60% of its global EV sales. However, the company’s EV orders in Europe have seen a significant drop, with CFO Arno Antlitz revealing a 50% decline from 300,000 last year to 150,000 this year.
It’s worth noting that Volkswagen is not alone in its decision to postpone EV-related plans. Several global automakers, including Ford and General Motors, have also delayed their EV battery production and model launches, while Toyota has revised its EV sales expectations for the current fiscal year.
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(Via)
