Volkswagen has announced a delay in its decision to build a fourth battery cell factory in Europe, citing lower-than-expected demand for electric vehicles (EVs) in the region.
The decision comes as a response to “market conditions, including the sluggish ramp up of the BEV (battery electric vehicle) market in Europe,” according to CEO Oliver Blume. (via Reuters)
Volkswagen has already chosen three battery gigafactory sites in Salzgitter, Germany; Valencia, Spain; and St. Thomas, Ontario, with a combined production potential of up to 200 gigawatt-hours (GWh) per year. Construction work is already underway at these sites, and they are expected to become operational between 2025 and 2027.
The decision to delay the fourth battery factory in Europe is a reflection of the slow EV market growth in the region. Volkswagen Group’s EV orders in Europe have declined by 50%, from 300,000 to 150,000, in the past year. This trend is not unique to Volkswagen, as several other automakers, including Ford, General Motors, and Toyota have also postponed their EV-related plans in recent weeks.
Ford announced this week it is delaying $12 billion in EV related investments, while General Motors abandoned its goal to produce 400,000 EVs in the US by mid-2024, also breaking off a $5 billion deal with Honda to jointly develop affordable EVs. Toyota also cut its EV sales projections despite soaring profits.