Volkswagen, Europe’s leading automobile manufacturer, has temporarily put on hold its plan to build a fourth electric vehicle (EV) battery factory. The decision was largely driven by the prevailing market conditions in Europe, CEO Oliver Blume noted.
Volkswagen advances plans for a fourth electric vehicle battery production facility.
By the end of the 2020s, the Volkswagen Group has planned to establish six gigafactories. Volkswagen has selected three online platforms, complemented by a location in Salzgitter, Germany, another in Valencia, Spain, and its latest addition in St. Thomas, Ontario.
Volkswagen deliberately planned to locate its third manufacturing facility in Europe, but ultimately chose North America to capitalize on the Investment and Trade Expansion Act (IRA) incentives.
For more than a year, the company has been actively seeking opportunities to establish its fourth site in Central Eastern Europe, weighing options in the Czech Republic, Hungary, Poland, and Slovakia.
Although the Czech Republic had been courting Volkswagen to establish a plant, officials now threaten to abandon their efforts and allocate the site to alternative investors if VW remains indecisive. The details emerged following Blume’s meeting with Czech officials this week, as scheduled.
According to Blume, it’s possible that there wasn’t a compelling business case for expanding into more markets during this period. The Volkswagen CEO explained that the decision hinged primarily on market conditions, specifically the slow uptake of electric vehicles in Europe.
Volkswagen is currently building three new service centers. According to Blume, the trio of crops boasts an impressive annual manufacturing capacity of approximately 200 gigawatt-hours (GWh).
According to Corporate CFO Arno Antlitz, electric vehicle (EV) orders in Europe have plummeted by 50%, declining from a previous high of 300,000 units over the past year to approximately 150,000.
Europe remains Volkswagen’s leading electric vehicle (EV) market, responsible for more than 60% of its global gross sales. Is the world’s second-largest economy at risk? XPeng’s upcoming new fashion models may cause the automaker to potentially forfeit market share within its region until these innovations are introduced.
Electrek’s Take
Major auto manufacturers, including Ford, General Motors, and Toyota, have paused their electric vehicle expansion plans, prompting Volkswagen to delay the opening of its fourth dedicated EV plant.
Ford is extending its goal of producing 600,000 electric vehicle runs by another 12 months, while postponing approximately $12 billion in planned manufacturing investments until later.
General Motors announces a delay in production of its newly launched electric vehicles, including the Equinox EV, Silverado RST EV, and GMC Sierra EV Denali, citing ongoing supply chain issues and quality control concerns. Automakers have uniformly disclosed delays in their battery plant developments.
Toyota slashes electric vehicle sales forecast by nearly 40% amid market uncertainty. The Japanese auto manufacturer announced the transfer, citing “heightened value competition” in China as the primary driver.
Toyota unexpectedly increased its investment in its North Carolina electric vehicle battery plant by $8 billion, totaling around $13.9 billion in a major commitment to electrification.
Automakers that invest now will reap the benefits as electric vehicle (EV) adoption is expected to continue its upward trajectory with no signs of slowing down. As these delaying strategies continue to lag, they will further trail behind industry pioneers like Tesla and BYD, who are rapidly expanding their global market presence.
Despite Volkswagen’s struggles with sluggish electric vehicle sales in Europe, Tesla’s Model Y emerged as the top-selling passenger car – whether fuel-powered or electric – in September. In just nine short months, this electric vehicle (EV) has achieved the prestigious honor for a remarkable sixth time. How is that so?
Tesla is manufacturing electric vehicles that customers want to buy, providing value to consumers. While some consumers may remain unconvinced of the value proposition offered by Volkswagen’s electric vehicles. The automaker has faced difficulties with its software programs and numerous options, resulting in a delay of new orders. However, it’s crucial to note that Volkswagen EVs are not inherently perilous. The city’s downtown area lacks a unique selling point akin to Tesla’s innovative presence.
