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Volkswagen puts off construction of gigafactory in Czech Republic amid low demand for electric cars

Volkswagen will not set up new European battery gigafactories for electric vehicles (EVs) for the time being, according to Euractiv.

The carmaker’s CEO Oliver Blume made this statement. He noted:

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. 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.

After a meeting with Czech Prime Minister Petr Fiala in Prague, Blume commented on Volkwagen’s decision. The Czech Republic offered Volkswagen a site in the west of the country. After the rejection, the government will look for another investor. Fiala said at a press conference on Wednesday, adding that the government will continue to work on the project:

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.

The Czech Republic is in talks with five other potential investors to build a factory on its territory to produce batteries for electric cars, Industry and Trade Minister Jozefa Sikely said. He did not name the investors, but said they were “from other continents”.

The automotive industry accounts for almost 10 per cent of the country’s GDP and directly employs more than 180,000 people, so investments in the electric car industry are essential for the Czech Republic.

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