Volkswagen will not take any action yet for a new battery factory

vw automotive

Volkswagen Postpones Its Fourth Battery Factory as Electric Vehicle Demand Drops in Europe

Volkswagen Group has suspended its plan to build a fourth battery factory for now, as the electric vehicle market in Europe remains below expectations. Volkswagen CEO Oliver Blume said the slow growth of the fully electric car market in Europe and certain market conditions make it not meaningful to build a new battery factory.

Volkswagen's Search for a Battery Factory

Volkswagen Group is seeking a gigafactory facility for electric vehicle batteries, but the fact that demand for electric vehicles in Europe has not met expectations has reduced the investment pressure required to establish a new facility. The company announced last year that its own electric vehicle orders in Europe dropped from 300.000 to 150.000.

VW Group has announced that it currently has plans to establish three battery factories in Germany, Sweden and Spain. It was stated that a fourth battery factory would be established in Eastern Europe. It was stated that countries such as the Czech Republic, Hungary, Poland or Slovakia were candidates for this facility.

State of the Electric Vehicle Market in Europe

The electric vehicle market in Europe has grown rapidly in recent years. However, this growth varies depending on factors such as government incentives and emission standards. The economic contraction and supply chain problems experienced especially during the pandemic period negatively affected the demand for electric vehicles.

According to data from the European Automobile Manufacturers Association (ACEA), fully electric car sales in the European Union increased by 2021 percent in the first half of 231, reaching 538.772 units. However, this figure constitutes only 7.5 percent of the total automobile market.