PRAGUE/FRANKFURT (Reuters) -Volkswagen AG is postponing its decision on where to build a gigafactory for electric car batteries in eastern Europe beyond 2022, pointing to economic uncertainty and high energy prices in the region. "Volkswagen AG and its battery company PowerCo are continuously evaluating suitable sites for their next gigafactory in Europe," the carmaker said by email on Thursday. The European Union fears an exodus of investment to the United States in light of generous green energy subsidies companies are offered under the Inflation Reduction Act, just as energy prices in Europe hit record highs with next year's supply still insecure.
"We see that people are more cautious due to recession expectations, and we are not selling so many cars," said Frank Fiedler, chief financial officer of Volkswagen Financial Services, in Braunschweig on Wednesday evening. Rising interest rates may weigh on earnings in the coming year, he said, adding that the Volkswagen unit could not make a concrete forecast for its operating profit yet.
UK car registrations jump 23.5% according to the Society of Motor Manufacturers and Traders.