Spain increases subsidies for electric car projects, will seek to work with VW

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The Spanish government pledged more European funds than initially planned to investors in the first phase of supporting electric mobility projects, ranging from vehicle batteries to cars, and said it was looking to work with Volkswagen after the German car manufacturer allegedly threatened to withdraw.

The Industry Ministry said the grants to be disbursed this year under the so-called PERTE plan with EU aid funds for the pandemic will increase to 877 million euros ($860 million) from 600 million euros, meaning that more of the planned total, 3,000 million, will be disbursed in this first phase.

The rest of the money remains to be awarded in the second phase, next year.

“Right now all the projects have guarantees so that they can be developed according to the needs that the companies had,” said the Minister of Industry, Reyes Maroto. The amount Volkswagen and other companies will receive will be defined next week, his ministry added.

Volkswagen’s Spanish subsidiary, SEAT, the Volkswagen Group and 60 associated companies want to mobilize 10,000 million euros to electrify the automotive industry in Spain and turn the country into a node for electric mobility in Europe, producing electric cars and batteries.

Other projects competing for funding focus mainly on batteries.

A Volkswagen spokesman declined to comment on reports that the automaker would receive less than it needed to advance investment, saying it had not released a minimum figure and would not comment on speculation before the final bid was announced.

Several Spanish media outlets have said Volkswagen had pressured the government to announce the disbursement promptly and threatened to abandon its plans for a factory if it was too low.

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SEAT received €167 million in the first interim results of the PERTE programme, announced on 1 August.

“We will continue working with the Wolkswagen-SEAT group, and with the rest of the manufacturers, so that Spain continues to be a world leader in the electric car, including batteries,” said Prime Minister Pedro Sánchez.

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