US Lures Likes Of Volkswagen, Northvolt With Battery Plant Subsidies: Report

Volkswagen AG VWAGY is reportedly shelving a planned battery plant in eastern Europe and prioritizing a similar facility in North America after estimating it could receive €10 billion in U.S. incentives.
Plans in North America have moved forward faster than expected and overtaken European decision-making, leading to VW's move, Financial Times reports citing familiar sources.
The report adds that the U.S. Inflation Reduction Act has sparked panic among European policymakers as high-tech industries like batteries look across the Atlantic as competition from China intensifies.
Last week's meeting in Brussels left industry executives complaining about Europe's absence of concrete measures.
VW has not decided on the locations of its plants in North America or Europe and was committed to its plan to build more cell factories in Europe. "But for this, we need the right framework conditions. That is why we wait and see what the so-called EU Green Deal will bring," the company said.
Battery maker Northvolt suggested it could choose the U.S. over Germany when deciding the location of its next gigafactory unless Brussels gave concrete support. Northvolt estimated it would be able to receive more than €8 billion in U.S. subsidies for one factory.
VW executives, including CFO Arno Antlitz and head of VW's components unit Thomas Schmall, lauded IRA for offering a tailwind to enlarge their global footprint even faster in the U.S.
They also highlighted Europe at risk of losing billions of investments, calling for a European public state aid program and lower prices for green energy.
Price Action: VWAGY shares closed lower by 2.03% at $18.81 on Tuesday.
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