The declining demand for BEVs made Volkswagen delay its decision on its fourth battery plant that was set to be built in an eastern European country. The news came after Volkswagen announced impressive BEV sales growth in the first nine months of 2023, but also its shrinking order banks mirroring the sluggish demand that has also been reported by other automakers.
In a statement shared by Skoda on Wednesday, VW Group’s CEO, Oliver Blume, said: “Based on market conditions, including the sluggish ramp up of the BEV market in Europe… there is for the time being no business rationale for deciding on further sites.”
More: VW Group’s BEV Sales Soar But Its Order Bank Is Shrinking
As reported by Reuters, the CEO met with Czech officials earlier this week, who were pushing for the gigafactory to be built in their country. Following the delay from Volkswagen, Czech Republic’s Prime Minister Petr Fiala said that they “cannot continue to hold the land for this project” and they will concentrate on other projects instead. In this context, Industry Minister Jozef Sikela confirmed they are in talks with 5 other investors, and 2 of the proposals are similar in scale to the VW plant.
Despite the bad news about the battery production facility investment, VW confirmed its commitment to Skoda’s growing electrified lineup with 6 upcoming EV launches by the end of 2026.
This is the second time that VW has put off the decision for the battery plant in Eastern Europe, following a statement from earlier in 2023 that suggested they were in “no rush”. Possible locations for VW’s fourth gigafactory included Czech Republic, Hungary, Poland, or Slovakia.
VW Group’s three remaining battery plants have been confirmed to be built in Salzgitter (Germany), Valencia (Spain), and St. Thomas (Canada), offering a combined production output potential of up to 200 GWh per year. This is down from the initial production output expectation of 240 GWh mentioned in VW’s 2022 plan which included 6 gigafactories in Europe by 2030.
