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Spain’s Revamped Aid Scheme for EVs Receives Positive Response Amid Concerns of Stagnation in the Race

According to Reuters, Volkswagen (ETR:VOWG_p) and Renault (EPA:RENA) are set to seek financial support from a Spanish government initiative aimed at boosting the production of electric vehicles (EVs) in the country. Stellantis and newcomer AEHRA may also follow suit and request funds under the revised scheme, as confirmed by representatives of the car manufacturers in question.

In a bid to keep pace with other countries in the electric vehicle (EV) race, Spain, the second-largest car producer in Europe, will be launching a new, more adaptable version of the PERTE initiative in July. The scheme is valued at €2 billion ($2.2 billion) and has been created using EU pandemic support funds.

The PERTE programme is expected to help Spain expand its EV capacity, which is crucial for its future as an industrial nation, especially in the face of stiff competition from the US and lower-cost countries in the EU’s eastern region.

The initial round of funding, valued at €2.9 billion, failed to garner interest, with only 27% of the funds being allocated. “Spain tried the best it could with the first (PERTE) but we need to make sure that the second one is a lot better and more flexible,” said Wayne Griffiths, chairman of the ANFAC Spanish vehicle manufacturing association and CEO of Volkswagen’s Spanish unit, SEAT.

“We cannot afford any more delays; we need to accelerate,”
said a Volkswagen spokesperson as the carmaker plans to seek funds from the revised Spanish government scheme aimed at boosting the production of electric vehicles (EVs) in the country.
The request for additional funding could involve manufacturing more EVs or assembling batteries in Spain, a project not covered by the funds received last year.
French automaker Renault, which received 40 million euros in the first funding round, also intends to participate in the new funding round, with the possibility of manufacturing more hybrid cars in Spain.
Spain has been authorised by the European Commission to relax the PERTE rules after last year’s low take-up led to the dismissal of two senior government officials.
Jose Maria Lopez, who is now leading the programme, expressed confidence that the remaining 2 billion euros will be disbursed for twin tenders, for EV and battery production, to be launched around July.

Under the revamped PERTE scheme, individual bids will be accepted instead of associations of large and small firms, and the selection process will be simpler.

The deadline for executing investments has also been extended from 2025 to 2028, which Volkswagen’s Wayne Griffiths described as “good news.” Stellantis, the Franco-Italian automaker that already manufactures EVs in Spain and received 67 million euros from the first PERTE, is in direct talks with the Spanish government to increase its production capacity.

The revised programme is also attracting new players such as Italy’s AEHRA, which plans to produce its first EVs by 2026 and is considering Spain as a manufacturing option alongside Italy or Central Europe. According to Griffiths, the use of EU funds is critical for Spain’s future as some investments would otherwise be unfeasible.

Despite Europe’s second-largest car producer, Spain, losing out on investment to rivals in the region and beyond, the country hopes to stay competitive in the electric vehicle (EV) race by launching a new version of the PERTE scheme worth €2bn.

Last year, only 27% of an allocated €2.9bn was used, prompting the launch of a new programme to attract investment to expand EV capacity. VW, Renault, Stellantis, and newcomer AEHRA are planning to request funds from the revised scheme, which is aimed at encouraging EV production in Spain. Bids will now be individual, and the selection criteria simplified.

The deadline for executing investments has been extended to 2028, three years longer than the original scheme. ANFAC data shows that Spanish sales of EVs and plug-in hybrids lag more than 10 percentage points behind the EU average and neighbouring France and Portugal’s. The revamped PERTE will include a specific line of financing for battery manufacturing, and the programme is hoping to attract battery plant investments from Tata Group, InoBat, Envision, and BYD.

The Spanish government is hoping to avoid any tensions with car manufacturers in the upcoming PERTE funding round.

Last year’s round resulted in Volkswagen’s SEAT receiving the largest sum of 357 million euros, although they had hoped for more. There were rumors that SEAT’s leadership had threatened to cancel their planned EV and battery investments unless they received 900 million euros.

The government was concerned that Volkswagen did not have a backup plan if it decided not to build its southern European battery factory in Spain.

However, the carmaker did not change its plans. SEAT’s Griffiths declined to comment on the alleged 900 million euro demand but admitted that the PERTE results were below their expectations.

($1 = 0.9165 euros)



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