Volkswagen has suspended its plans to build a battery plant in eastern Europe after estimating it could receive up to €10B in U.S. incentives to build a similar facility in North America.
Volkswagen told EU officials it expects to receive €9B to €10B in subsidies and loans from the U.S.’s Inflation Reduction Act (IRA).
According to sources, the automaker is waiting to see how the EU would respond to the U.S.’s incentives before continuing in eastern Europe.
- The decision to suspend building plans is the latest fallout from the Biden Administration’s $369B IRA, which is luring European companies to the U.S.
- The European Commission is expected to release its Net Zero Industry Act next week as part of a broader response to the U.S.’s IRA.
- According to industry executives who saw an early draft of the Net Zero Industry Act, the EU’s response fell short of expectations.
