The Volkswagen group has put a stop to its plans to build a battery plant in Eastern Europe. As announced this Wednesday the Financial Times, the German company is thinking of bringing this gigafactory to the United States because of the strong incentives that Washington offers for green industrial projects. The German consortium estimates that it can receive about 10,000 million dollars (9,474.5 million euros at the current exchange rate) in loans and aid by the Inflation Reduction Act (IRA, for its acronym in English).
VW has not yet made the decision to take the plant to the US because it is waiting to see the response of the European Commission (EC), which has yet to finalize its “Green Agreement Industrial Plan”, with which the bloc wants to face strong competition from the US and China. Among the measures that the EC is working on is to make state aid rules more flexible to allow governments to support their companies more.
Germany and France capture almost eight out of ten euros of aid packages after the invasion of Ukraine. The European Commission itself fears that a further relaxation of the State subsidy rules could further increase the difference between the two European locomotives and the rest of the countries. The rich (but small) countries of the north fear that the size of their wallets cannot compete with those of Paris and Berlin, and they are betting on deepening the European internal market. The countries of the south, Spain among them, although they are large, do not have fiscal margin to launch themselves to subsidize their industry.
“Many states in the US have contacted us and they all highlight the IRA. When we put the figures together, the conditions they offer are much more interesting than the conditions they offer in Europe”, a senior executive from a battery manufacturer has indicated to the Financial Times.
The Volkswagen group had announced in 2021 that it plans to have six gigafactories in Europe in operation by 2030, one of which will be in Sagunto, Valencia. This factory, which has already been approved and is expected to come into operation in 2026, will supply battery cells to the car factories that the group has in Martorell (Barcelona) and Landaben (Navarra). VW, which will receive 356.58 million from the motor Perte to electrify its production in Spain, will invest 4,500 million euros in its Valencian gigafactory.
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