The Czechs left the meeting with representatives of the Volkswagen automobile concern with nothing accomplished. Volkswagen will build factories for batteries for electric cars elsewhere – in its home country of Germany, Spain and Canada. He will not make a decision about other locations yet.
“It is certainly not positive for the Czech economy,” commented Radek Špicar, vice president of the Union of Industry and Transport, on Volkswagen’s decision. On the side of incentives for VW, although the Czech Republic came up with a competitive proposal, it fails elsewhere.
“It is necessary to start working again on the identification of places, whether greenfields (construction on a green field, editor’s note) or brownfields (already existing unused areas, editor’s note), which the Czech Republic will be able to foreign strategic investors in those areas, which we want and need to offer here. So that investments do not disappear, as in the case of Volkswagen, to Canada, Germany or Spain, or to Poland, which is really becoming our huge competitor in this area of electromobility,” Špicar says.
The campus in Línich near Pilsen should not remain abandoned. The Czech Republic is already negotiating with five other interested parties for an investment in the order of billions of euros, Industry Minister Jozef Síkela said at a press conference. “They are from different continents,” he announced at the government’s press conference.
What does Volkswagen’s decision mean for the Czech economy?
If we should look at it at least a little positively, it means that Volkswagen did not say a definitive no. But it is clear, and this is not so good news, that the final decision is being delayed for quite some time. It is certainly not positive for the Czech economy.
Should the Czech Republic now hold Volkswagen’s place near Pilsen for an undefined period of time?
The Volkswagen concern is not the only interested party that is currently looking at the Czech Republic as a possible destination for its investment in the field of electromobility. We need a train not to miss us in this area. And to have a complete chain on our territory, from the extraction of raw materials that are needed for electric cars, some of which we have here in relatively significant quantities, to their processing in the territory of the Czech Republic and, above all, their use for the production of the final product, i.e. batteries.
It would be ideal to then use the battery in a car that will be assembled in the Czech Republic. So I think that it is still necessary to strive to ensure that all the components of that chain are here so that the added value is created primarily in the Czech Republic and so that the very operations that will be newly created, perhaps even replace those that precisely in connection with the transition to pure mobility, they will disappear in the Czech Republic – and they will.
Should the Czech Republic keep the site in Líny reserved until VW makes a decision? Or should arrangements be made with other possible investors who will be able to build a similar factory here? Industry Minister Síkela announced that they are looking for five…
This is for the government to decide. But if there is any lesson to be learned from this long negotiation, it is that the Czech Republic must be much better prepared for the arrival of such large investments that come in connection with new opportunities. I mean, of course, electromobility, but also, for example, the development of chips.
And if it turned out a few months ago that we are simply no longer a country that, like many years ago thanks to the excellent work of CzechInvest, had several industrial zones ready for almost any investor of any size and any nature, then this is no longer the case. And that is our big handicap at the moment.
It is necessary to start working again on the identification of places, whether greenfields or brownfields, that the Czech Republic will be able to offer to foreign strategic investors in the areas that we want and need here. So that investments do not disappear, as in the case of Volkswagen, to Canada, Germany or Spain, or to Poland, which is indeed becoming our huge competitor in this area of electromobility.
Do you have any idea what incentives or benefits the Czech Republic offered Volkswagen when they built a factory here?
I was not personally present at those meetings. I am not able to describe in detail what the Czech government’s offer to the Volkswagen concern looked like in the area of investment incentives. At least from the information I have received, I don’t think the government has underestimated this. I have a feeling that the main reason, as Volkswagen said quite clearly after all, is that the concern has already invested in three other locations and does not need to build another large gigafactory at this moment.
Did the Czech Republic underestimate anything else, apart from selecting suitable locations?
Apart from the unpreparedness of the industrial zones, it is a completely empty labor market. When we talk to investors from various fields, the biggest scarecrow and the biggest risk they see in the Czech Republic is the lack of qualified workers in almost any sector. And the second thing that will be extremely difficult to solve, but we have to solve it, is the price of energy.
We have much more expensive energy than, for example, Spain, where many investments are now ending, including the gigafactory being prepared by Volkswagen. We are the most industrialized economy in Europe, we have a really large number of energy-intensive enterprises. And if we were not able to provide them with a competitive price for electricity and gas, it would dramatically negatively affect our competitiveness in the years to come.