Volkswagen will not build a gigafactory in Czechia. Talks with other investors continue

Volkswagen’s CEO has announced that the carmaker will not proceed with plans to build a large-scale battery plant in the Czech Republic. This is despite the Czech government describing the investment as crucial only a few months ago.

Volkswagen CEO Oliver Blume also revealed that the group will not initiate the construction of further European gigafactories producing batteries for electric vehicles. According to Euractiv, he justified the decision in part by saying that the market for electric vehicles, and thus batteries, is not growing as expected. Czechia had already begun selecting a suitable site in anticipation of the automotive giant’s investment, followed by negotiations with the owners of the former airfield in Líny in the Pilsen region.

"Given the market situation, including the slower uptake of electric vehicles in Europe, there are currently no economic reasons to make decisions on further locations in Europe,"said CEO Blume, as quoted by Czech Television.

Blume commented on Volkswagen’s decision after a meeting with Czech Prime Minister Petr Fiala in Prague. Following the rejection, the Czech government will seek another investor and continue offering the land, according to the prime minister.

According to Fiala, the gigafactory project is one of the government’s strategic priorities. The prime minister described it as being in the national interest for the entire chain from lithium mining through to the gigafactory—battery production and their subsequent installation in cars—to take place in the Czech Republic. The government therefore wants to continue working on the project.

According to Minister of Industry and Trade Jozef Síkela, Czechia is in talks with five other potential investors on building an electric vehicle battery plant in the country. Síkela did not disclose the investors’ names, but they are reportedly investors "from other continents".

Investments in electric mobility are crucial for Czechia, as the automotive industry accounts for nearly 10 % of GDP and directly employs more than 180 000 people.