The European Commission approved a plan by Slovakia to provide state aid to Volvo Car, supporting the Swedish auto maker’s development of a new electric-vehicle production plant in the country.
Under the plan, Slovakia will issue grants worth 267 million euros ($289.4 million) to Volvo Car.
The company will invest EUR1.2 billion in the plant which is expected to have an initial capacity of around 250,000 electric vehicles a year, creating at least 3,300 direct jobs in addition to further indirect jobs.
The commission said the project will contribute to job creation, the economic development and the competitiveness of a disadvantaged area while having a limited impact on competition and trade, and will be located in an area of the country already eligible for regional aid.
“On this basis, the commission approved the Slovak measure under EU State aid rules,” it said in a statement Monday.
Volvo Car originally outlined plans for the project in 2022 to complement its Belgium plant in western Europe and Swedish plant in northern Europe. It said at the time that series production of next-generation, pure electric Volvo cars was scheduled to start in 2026.
