New industry is born right now. American subsidies are moving this industry to America. This is unstoppable and quick movement. Because the industry is so quickly moving to America, European Union is quickly becoming a place suitable only for sheep growers, like Ireland. European Union politicians hope later on to complain to the WTO about these subsidies. If the complain to WTO is coming from poor sheep growers who in the world will pay attention to it?
"Volkswagen AG, Europe's largest car maker, said Friday that it would invest more than $5 billion in its planned battery-cell factory in Canada, making it the company's largest in the world and creating thousands of jobs. The move is part of a strategic pivot to capture a bigger share of U.S. electric-vehicle markets, driven by attractive subsidies, Europe's ponderous bureaucracy and uncertain economic prospects.
The plant will be built and operated by VW's battery unit, PowerCo, and will supply VW's U.S. factories with battery cells. Construction of the factory is slated to begin next year and production of battery cells projected to start in 2027. When operating at full capacity, the Canadian facility is expected to churn out battery cells with an annual capacity of 90 gigawatt-hours, twice the size of its European plants under construction in Germany and Spain, and create 3,000 jobs directly at the plant.
Canadian Prime Minister Justin Trudeau said that, once built, the VW battery factory would be the largest manufacturing plant in the country, calling it a "win for workers, for the community, and for the economy."
VW's U.S. pivot, initiated a couple of years ago, has accelerated considerably since President Biden signed the Inflation Reduction Act into law last August. It has seen VW slow-walk or put on ice various expansion plans in Europe, including a giant battery plant in the Czech Republic.
The shift illustrates the growing competition for investment in factories and jobs between the U.S. and Europe, which has struggled to respond to the IRA and whose recovery is being threatened by sanctions on Russia, high labor costs and expensive energy as a result of these sanctions.
Oliver Blume, who took over as VW's CEO in September, has shifted the car maker's focus away from Europe to home in on its two geographic trouble spots -- the U.S. and China.
In the months after the adoption of the IRA, VW moved its European battery buildup into the slow lane, and fast-tracked its strategy to boost American production of electric vehicles -- part of an older plan to boost its share of the world's most profitable auto market.
In March, VW announced in rapid succession that it would build its first North American battery-cell manufacturing plant in St. Thomas, Ontario, as well as a $2 billion plant in South Carolina to manufacture Scout Motors all-electric off-road vehicles.
VW sold 15,700 fully electric cars in the U.S. in the first three months of the year, about 11% of its worldwide EV sales, the company said.
As VW executives forged ahead with talks with Canadian and regional U.S. politicians to garner support and line up incentives for their expansion plans, they had all but stopped parallel discussions in Europe, dismayed by the EU's lackluster response to U.S. investment aid.
Other companies at the forefront of Europe's electric-vehicle transition have also been losing patience with the EU. For years, Europe has been ahead of the U.S. in capital investment in battery-cell manufacturing plants. But that shifted as soon as Mr. Biden signed the IRA into law last summer.
Data collected by the European Battery Alliance, an industry group, show that new battery plant announcements in the U.S. jumped after the bill became law and dropped sharply in Europe." [1]
Give Angela Merkel a second Grand Cross. She was a brilliant German chancellor who promoted business in Europe. After replacing her, Olaf Scholz is just a silly dwarf with a mysterious smile.
1. EXCHANGE --- Business News: VW Pivots Spending To North America
Boston, William. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 22 Apr 2023: B.3.
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