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Volkswagen's ID.7

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The VW Group currently sees no chance of setting up a second battery factory at its home base in Lower Saxony. Energy prices in Germany are too high for that, according to sources close to the group.

Battery cells require a lot of energy in production, but are considered a key technology of the future. Lower Saxony's Prime Minister Stephan Weil (SPD), who also sits on the VW supervisory board, had therefore repeatedly advocated a second so-called gigafactory at the Emden site. In the meantime, however, Weil has calculated that such a factory is currently not economically viable, according to the group.

At the end of April, the politician launched an initiative for a state-subsidized "transformation electricity price" of seven cents per kilowatt hour, which is intended to make Germany competitive with Asia and the USA. Currently, the price cap for medium-sized and large companies in this country is 13 cents per kilowatt hour.

Meeting of car bosses with Chancellor Scholz

According to SPIEGEL information, the high energy prices were also the subject of a meeting of German car bosses with Chancellor Olaf Scholz (SPD) on Tuesday in Berlin, which was also attended by VW boss Oliver Blume. Blume supports Weil's proposal: The automotive industry needs planning security for its future investments.

A few days before the meeting, the federal government and the state of Schleswig-Holstein had pledged to promote the establishment of a battery factory of the Swedish supplier Northvolt in Heide near the North Sea coast. The automotive industry hopes that this will send a signal for further future projects. VW is currently building its first cell factory in Salzgitter, and another site is being built in Sagunto, Spain. Talks are also underway for a plant in Eastern Europe.

VW says it is sticking to its plan to build cell factories for around 2030 gigawatt hours in Europe by 240, but that it must "be competitive in terms of cell costs by international standards".

Volkswagen's billion-dollar electric offensive is currently overshadowed by a fierce price war on the global car market and weak earnings of the core VW brand. As it became known on Wednesday, the group is therefore planning a savings and restructuring program in the billions.

The VW Group wants to significantly improve the brand's results, streamline committees and the product range, and accelerate decision-making processes. They are "not satisfied" with the performance of the brand, they say in Wolfsburg, and urgently need a buffer for the difficult times ahead.