Volkswagen says EV battery plants in Europe may 'practically unviable' due to energy costs in region
The CEO praised the U.S. Inflation Reduction Act for offering "companies highly attractive incentives to invest in new plants and production."
Volkswagen CEO Thomas Schafer says high energy prices in Europe may make having vehicle battery factories in that region "practically unviable."
"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," Schafer wrote Monday on LinkedIn.
Volkswagen is based in Germany, and such batteries are used in electric cars, toward which vehicle makers and buyers are moving as an alternative to ones that burn fossil fuel.
Schafer praised the U.S. Inflation Reduction Act for offering "companies highly attractive incentives to invest in new plants and production," and criticized the EU for not doing enough to help with energy plans for the future.
"On the international stage, Germany and the European Union are rapidly losing their attractiveness and competitiveness," he wrote.
He said the EU "is sticking to outdated and bureaucratic state aid rules that promote regions rather than preserving and transforming entire industrial sites."
Energy prices have soared since Russia's invasion of Ukraine in February, with prices increasing as winter approaches.
As of last month had household gas prices increase 17.7%, according to Germany's Federal Statistical Office.