Poland to decide by summer if European funds will support EV plant

By Marek Strzelecki and Karol Badohal

WARSAW (Reuters) – Poland’s government faces a decision by the summer on whether to support a plan of the previous administration to build an electric vehicle (EV) plant with support from European Union recovery funds, a senior official told Reuters.

With a little more than two years left to spend nearly 60 billion euros ($64 billion) in EU loans and grants, Poland is finalizing a revision of the spending plan for Brussels, aiming to extend the deadline for the EV project commonly known as “Izera”.Building the plant with China’s Geely Holding, parent of carmaker Volvo and which was picked as partner for the project in 2022, was not an ideal solution, Jan Szyszko, deputy minister of development funds and regional policy, said in an interview.But the alternative of supporting already-operating projects, including bus making, had shortcomings too, he said.

“Which philosophy we are closer to will be a decision at the highest political level and will certainly go beyond this building, to be clear,” Szyszko said.

As the electric car market is grappling with a price war and trade tensions between China and the EU, Chinese EV makers are expanding their presence in Europe.

“Either this factory will be in Poland and Poles will buy these cars manufactured in Poland, or this factory will be in another EU country, employment will be in another EU country and Poles will buy these cars from another EU country anyway,” he said.

China’s Chery Auto is nearing a deal to start making cars in Spain, and Madrid will open two tenders this year for companies to request a total of 1.7 billion euros ($1.8 billion) in loans and grants for EV production from EU pandemic relief funds.

($1 = 0.9384 euros)

(Reporting by Marek Strzelecki and Karol Badohal; Editing by David Holmes)