FRANKFURT, March 9 — German carmaker Volkswagen said Wednesday it would “wait and see” how the European Union responds to a massive US green subsidy package before moving ahead with a planned battery plant in eastern Europe.
The announcement will likely fuel concerns among EU leaders that US President Joe Biden’s landmark Inflation Reduction Act (IRA) — which includes US$370 billion (RM3.12 trillion) in climate funding — will lure away investment and put European jobs at risk.
“We are still evaluating suitable locations for our next cell factories in eastern Europe and North America. No decisions have been made yet,” a VW spokesman said in a statement.
“We stick to our plan to build cell factories for about 240 GWh in Europe by 2030, but for this we need competitive framework conditions.
“That is why we wait and see what the so-called EU green deal will bring.”
The IRA includes tax cuts for companies that invest in clean energy, along with subsidies for electric vehicles and batteries — if they are manufactured in North America.
To head off the threat, the European Commission has unveiled proposals such as a relaxation of state aid rules to level the playing the field.
Brussels is also eyeing a trade agreement with the United States that would allow the EU to access some benefits of Biden’s climate plan.
European Commission chief Ursula von der Leyen is expected to discuss the issue when she meets Biden at the White House on Friday.
Thomas Schmall, head of VW’s components division, last week urged the EU to come up with an “IRA matching clause”.
“Today, the battery business is led by Asian companies,” he wrote in a post on LinkedIn.
“And while the United States are catching up thanks to the Inflation Reduction Act, Europe is more and more lagging behind,” he said.
“The conditions of the IRA are so attractive that Europe risks to lose the race for billions of investments that will be decided in the coming months and years.” — AFP
