Czech Industry Ministry: Talks with VW over gigafactory continue

Talks between representatives of the Czech government and Volkswagen Group on the possible construction of an electric vehicle battery plant in Líně near Plzeň are continuing, as is the project's technical preparation. Vojtěch Srnka, spokesman for the Ministry of Industry and Trade (MIT), told CTK today. He was responding to a Financial Times report that the group is postponing its decision on building the gigafactory and now wants to focus on constructing a similar plant in North America. Government spokesman Václav Smolka told CTK that the decision to build the plant in America had long been planned and was unrelated to the European factory.

„We were informed in advance about Volkswagen's plan for a battery production plant project in the United States. This morning, I spoke by phone with Martin Jahn from Škoda Auto's management, who confirmed that the decision on the gigafactory in the US has no impact on a similar project in Europe,“ Industry Minister Jozef Síkela said on Twitter.

Škoda Auto CEO Klaus Zellmer also said a week ago that Volkswagen would need more time to decide on the gigafactory. According to him, the reason is the possible consideration of changes in the new package of support measures under the Green Deal programme being prepared by the European Union. „Czechia is now in an excellent position among the candidate countries to secure the gigafactory. However, it is necessary to wait and see what the so-called new Green Deal brings. The group must also assess it in terms of subsidies and investment incentives,“ Zellmer said.

According to the Financial Times, Volkswagen now wants to focus on building a similar plant in North America, where it could receive incentives worth €10 billion (CZK 235 billion). Volkswagen is now waiting to see how the European Union responds to Washington's massive support for green energy, amounting to $369 billion (CZK 8.25 trillion). The newspaper also writes that Volkswagen still plans to build battery plants in Europe. However, according to the group, this requires „the right framework conditions“.

„Friday's supervisory board decision on the construction of the gigafactory plant had been planned for a long time, and we were assured that it is unrelated to the plant in Europe. Volkswagen informed us that it intends to announce its final decision on the construction of the gigafactory in Europe, for which the Czech Republic is bidding, only after the European Commission's position on the US Inflation Reduction Act is known,“ Smolka said.

Czechia is one of four candidates for the gigafactory in Eastern Europe. The investment is expected to reach around CZK 120 billion.

According to Plzeň Region governor Rudolf Špoták (Pirates), moving battery production to North America would mean a major loss of opportunity for the Czech Republic to develop industry and other sectors linked to the automotive industry. „This is a crucial project, the loss of which could backfire on the Plzeň Region during the transformation of the global economy,“ he told CTK. If Volkswagen Group's decision is confirmed, the Plzeň Region would lose planned investments in infrastructure and regional development worth tens of billions of crowns, according to Špoták. „I cannot help fearing that our behaviour will come back to haunt us like a boomerang. Europe seems incapable of learning when it comes to letting strong investors leave for other parts of the world,“ he added.

„We do not believe it (the move to the US). In our view, it is merely information for the media, let's say to calm the crowds, because the article (in the Financial Times) says at the end that they are continuing negotiations. Essentially, it is an attempt to put pressure on the European Union, and by extension on the Czech government,“ Michal Švihla, a representative of aviation schools in Líně and the European General Aviation Development Association (EAGA), which wants to develop and keep operational the reserve military airport in Líně, told CTK.

„If it turns out to be true, it only confirms that the entire project is unprepared and has not been discussed locally, and if it is true, I am pleased about it,“ Plzeň mayor Roman Zarzycký (ANO) told CTK.