Investment in German and EU industrial projects such as battery cell factories will be unfeasible if the region’s policy makers fail to control ballooning energy prices in the long-term, Volkswagen brand CEO Thomas Schaefer said on Monday.
“Unless we manage to reduce energy prices in Germany and Europe quickly and reliably, investments in energy-intensive production or new battery cell factories in Germany and the EU will be practically unviable,” Schaefer posted on LinkedIn. “The value creation in this area will take place elsewhere.”
An outline for industrial policy co-operation hatched by the French and German economy ministers last week “falls short in crucial areas and does not address the envisaged priorities”, Schaefer said.
Europe’s energy crisis is compounding pressure on how to respond to the US’ Inflation Reduction Act, President Joe Biden’s climate and tax law that aims to boost domestic production of electric cars and reduce reliance on China for battery components and materials. EU officials have said the subsidy programme violates World Trade Organisation rules and discriminates against non-US companies.
The EU’s programmes don’t focus enough on “the short-term ramp-up, scaling and industrialisation of production,” Schaefer said, critisising what he called “outdated and bureaucratic state-aid rules”.
Volkswagen plans to have six battery factories in operation across Europe by 2030 under its battery company PowerCo, which broke ground on its lead plant in Germany in July and signed a €3bn (R53bn) joint venture with Umicore in September for cathode material production.
More stories like this are available on bloomberg.com
VW warns soaring EU energy costs render battery plants unviable
Image: Morris MacMatzen/Getty Images
Investment in German and EU industrial projects such as battery cell factories will be unfeasible if the region’s policy makers fail to control ballooning energy prices in the long-term, Volkswagen brand CEO Thomas Schaefer said on Monday.
“Unless we manage to reduce energy prices in Germany and Europe quickly and reliably, investments in energy-intensive production or new battery cell factories in Germany and the EU will be practically unviable,” Schaefer posted on LinkedIn. “The value creation in this area will take place elsewhere.”
An outline for industrial policy co-operation hatched by the French and German economy ministers last week “falls short in crucial areas and does not address the envisaged priorities”, Schaefer said.
Europe’s energy crisis is compounding pressure on how to respond to the US’ Inflation Reduction Act, President Joe Biden’s climate and tax law that aims to boost domestic production of electric cars and reduce reliance on China for battery components and materials. EU officials have said the subsidy programme violates World Trade Organisation rules and discriminates against non-US companies.
The EU’s programmes don’t focus enough on “the short-term ramp-up, scaling and industrialisation of production,” Schaefer said, critisising what he called “outdated and bureaucratic state-aid rules”.
Volkswagen plans to have six battery factories in operation across Europe by 2030 under its battery company PowerCo, which broke ground on its lead plant in Germany in July and signed a €3bn (R53bn) joint venture with Umicore in September for cathode material production.
More stories like this are available on bloomberg.com
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