Volkswagen Delays European EV Battery Factory Decision

Volkswagen has postponed making a decision on the location for its fourth battery factory, citing lackluster demand for electric vehicles in Europe.

Chairman Oliver Blume announced the decision on Wednesday, stating that the company had been considering sites in eastern Europe, including the Czech Republic, Hungary, Poland, and Slovakia, reports Reuters.

“Based on market conditions, including the sluggish ramp up of the BEV (battery electric vehicle) market in Europe… there is for the time being no business rationale for deciding on further sites,” said Oliver Blume, Chairman of Volkswagen, in a statement provided by Skoda Auto, Volkswagen’s Czech unit.

Czech officials have responded by offering their proposed site for Volkswagen’s battery plant to other investors. “We cannot continue to hold the land for this project,” said Prime Minister Petr Fiala in a news conference. Industry Minister Jozef Sikela revealed that talks are underway with five other investors, two of which are on a similar scale to Volkswagen’s plans.

Volkswagen had previously delayed the decision a year ago and stated earlier this year that it was in no rush to finalize the location. The company has already selected sites for battery cell production in Salzgitter, Germany; Valencia, Spain; and St. Thomas, Canada, with a combined production potential of up to 200 gigawatt-hours per year.

Despite the delay, Volkswagen remains committed to e-mobility at Skoda Auto, the Czech Republic’s largest exporter and an economic indicator. The company is running a program to introduce new electric models in the coming years.

The announcement comes as Volkswagen’s order book for EVs in Europe has dropped to 150,000 from 300,000 last year, joining a growing chorus of carmakers and analysts warning that EV demand is not developing as anticipated.