Millions of money for an electric car factory in Slovakia

Millions of money for an electric car factory in Slovakia

Swedish-Chinese carmaker Volvo announced in July 2022 that it will build a third plant in Europe – which will produce only electric cars. The factory in Kosice, Slovakia is the first European production site for Volvo Cars for almost 60 years. The main factory in Torslanda opened in 1964, the factory in Ghent followed a year later.

The European Commission has now ruled that Slovakia’s 267 million euro investment aid for Volvo complies with EU state aid rules – and has granted the funding. The move will contribute to the EU’s strategic goals regarding job creation, regional development and the European Green Deal.

The new Volvo factory is also being built in an area that was previously structurally weak and disadvantaged, which was one of the reasons why the EU allowed Slovakia to receive funding under European state aid rules. This also prevents Volvo from possibly building a plant in non-European countries.

Volvo itself will invest a good 1.2 billion euros in the project, as the carmaker announced in July 2022. The plant is expected to have an initial capacity of about 250,000 electric vehicles per year, with the ability to expand upwards. Production is scheduled to begin in 2026. The project is expected to create at least 3,300 direct jobs and several thousand indirect jobs.

The new plant should be fully weathered. Kosice also offers good logistics and transport connections to the rest of Europe and access to an excellent supplier infrastructure. With the decision to choose Slovakia as the location of the new plant, Volvo is creating a European production triangle that complements the Western European plant in Ghent (Belgium) and the Northern European plant in Torslanda (Sweden). It is intended to help Volvo become an all-electric car brand by 2030.

Source: European Commission – press release from April 8, 2024 / Volvo – press release from July 1, 2022