Volkswagen rejects Czech gigafactory location, citing low demand for EV batteries

Volkswagen will not set up more European gigafactories for producing electric vehicle (EV) batteries for the time being, the carmaker’s CEO Oliver Blume has revealed, despite Czechia hoping to receive investments from the automotive giant.

“Given the market situation, including the slower uptake of the EV market in Europe, there are no commercial reasons to decide on additional locations in Europe for the time being,” said Blume, CEO, as quoted by Czech television.

“At the same time, Volkswagen and PowerCo have already selected three sites for battery cell production: Salzgitter (Germany), Valencia (Spain) and St. Thomas (Canada). These three sites have a production potential of up to 200 GWh per year,” Blume added.

Blume commented on Volkwagen’s decision after meeting with Czech Prime Minister Petr Fiala in Prague. The Czech Republic offered Volkswagen a site in the west of the country. After rejection, the government will try to find another investor.

“The gigafactory project is one of the strategic priorities of the government, and it is in our interest to have the entire chain from lithium mining through the gigafactory, i.e. battery production, to the final products in the Czech Republic,” said Fiala said at a press conference on Wednesday, adding that the government will continue to work on the project.

According to Industry and Trade Minister Jozef Síkela, Czechia is in talks with five other potential investors to build a battery factory for EVs on its territory. Síkela did not reveal the names of the investors, but they should be “from other continents”.

Investments in electromobility are crucial for the country, as the automotive industry accounts for nearly 10% of its GDP and directly employs more than 180,000 people.

(Aneta Zachová | Euractiv.cz)

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