Volkswagen Awaits EU Response On US Subsidy Plan

Automaker Volkswagen said on Wednesday it was waiting for the European Union’s response to the US subsidy plan before making a decision on the location of its future battery factory.

The European number 1 in the car industry is thus putting pressure on the Commission to lighten the burden of investments in electric mobility, otherwise it could prefer a location in North America where companies benefit from billions of dollars in subsidies. of the American government since the implementation of its climate plan, the “Inflation Reduction Act” (IRA).

“We are still evaluating suitable locations for our next cell factories in Eastern Europe and North America. No decision has been made yet. We are sticking to our plan to build cell factories for approximately 240 GWh in Europe by 2030, but for that we need competitive framework conditions,” a spokesperson said on Wednesday.

“That’s why we are waiting to see what the EU Green Deal will bring,” he added.

Launched in August 2022 in the United States, the IRA promises tax credits to battery manufacturers, half of whose components would be manufactured from 2024 on North American territory.

Since then, projects for battery factories and electric vehicles have multiplied across the Atlantic, threatening European industry.

The European Commission, which has itself launched a green pact, hopes to reach an agreement with Washington in order to benefit from treatment that would be close to that of a free trade agreement.

The subject will be on the table during the visit of the President of the European Commission, Ursula von der Leyen who will meet Joe Biden in Washington on Friday.

“Today the battery industry is led by Asian companies. And while the US is catching up thanks to the Inflation Reduction Act, Europe is falling further and further behind,” said Thomas. Schmall, a member of Volkswagen’s board of directors, on his Linkedin account last week.

“The terms of the IRA are so attractive that Europe risks losing the race for billions of investments which will be decided in the months and years to come”, he added, indicating that “important location decisions factories would be made in the coming days, months and years”.

The group still plans to set up two battery cell factories in Europe, one near its historic site in Salzgitter in Germany, the other in Valencia in Spain.

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