Source: Getty Images/Andrii Yalanskyi
The aid measure will be in the form of direct grants to the EV plant project, which will see Volvo Cars investing about €1.2 billion
The European Commission has found that Slovakia's €267 million state-aid to support Volvo Cars’ EV plant is in line with EU State aid rules, the Commission announced on April 8.
The said aid is aimed at supporting the establishment of a new EV manufacturing plant in Valaliky, near Košice in Eastern Slovakia.
Earlier, Slovakia had notified the European Commission of its plan to grant €267 million to support Volvo Cars’ EV factory, which will be the Swedish carmaker’s third production facility in Europe. The aid measure will be in the form of direct grants to the EV plant project, which will see Volvo Cars investing about €1.2 billion.
The said EV production plant is expected to have an initial capacity of approximately 250,000 EVs per year. The project is expected to create at least 3,300 direct jobs, as well as other indirect jobs, the Commission said in its note, adding that the state-aid will contribute to the EU's strategic objectives relating to job creation, regional development and the European Green Deal.
According to the European Commission, Valaliky in Eastern Slovakia, where Volvo Cars’ EV factory is slated to come up, is an area eligible for regional aid under Article 107(3)(a) of the Treaty on the Functioning of the EU (‘TFEU').
“This area is also identified as a Just Transition Fund territory, that is areas most negatively impacted by the transition towards climate-neutrality,” the Commission said.
It assessed the measure under EU State aid rules, in particular Article 107(3)(a) TFEU, which allows Member States to promote the economic development of the most disadvantaged areas of the EU, and the 2021 Regional Aid Guidelines. It concluded that the measure would contribute to job creation, the economic development and the competitiveness of a disadvantaged area.
Further, the measure is expected to have a limited impact on competition and trade within the EU. Moreover, the aid is proportionate and limited to the minimum necessary to trigger the investment in Eastern Slovakia, the Commission said.
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