Volkswagen postpones decision on Eastern Europe gigafactory location

Volkswagen has announced that the company is postponing its decision on where to build a planned battery cell gigafactory in eastern Europe. The automaker cited economic uncertainty and high energy prices when making the announcement on December 8.

"Volkswagen AG and its battery company PowerCo are continuously evaluating suitable sites for their next gigafactory in Europe," the company told Reuters by email on Thursday. "There is no pressure to act as we take some more time for decision-making in light of current circumstances," it said. "At present, there is no impact on planned start of construction or start of production."

In an interview on Tuesday, Volkswagen brand chief Thomas Schaefer said Europe's energy prices were making it hard to justify to shareholders why the carmaker would build a battery plant there.

"If you have the option of building a battery plant in Europe, where electricity costs 15 cents per kilowatt hour, but you can get it in China or America for 2-3 cents, we are not in a position under stock corporation law to say we will do it here out of solidarity," Schaefer said.

"This is a red-hot topic and people often underestimate how complex it is to move forward on it here," he added.

The company has begun searching for sites for its first gigafactory outside Europe in Canada.

By Michael Elkins | [email protected]

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