German carmaker Volkswagen Group confirmed on Wednesday it cannot yet decide on its next battery gigafactory due to current market conditions, Kallanish reports.

Earlier this week, the company and its Czech subsidiary Škoda held talks with the Czech government regarding Škoda’s electrification transformation and the potential localisation of a gigafactory in the country.

Despite a “productive business discussion,” and positive collaboration with Czech stakeholders, Volkswagen’s ceo Oliver said in an emailed statement to Kallanish “there is, for the time being, no business rationale for deciding on further sites.”

The group had previously announced a plan to build a gigafactory, through its PowerCo battery subsidiary, in eastern Europe. The Czech Republic, home to Škoda, was competing for the proposed investment with Hungary and Poland. Overall, the group had plans to build six gigafactories, for which three sites have already been selected: Salzigtter (Germany), Valencia (Spain) and St. Thomas (Canada).

“The Czech government, in collaboration with local partners, has done an excellent job for the potential realisation of a battery factory,” says Blume, noting however that market conditions including “the sluggish ramp-up of the BEV market in Europe” is getting in the way of an investment decision.

Yet, Škoda chief executive Klaus Zellmer highlighted their commitment to “shaping the transformation of the [Czech] automotive industry” is unchanged. He says the future of Škoda Auto is electric, and the company is dedicated to investing €5.6 billion ($5.9 billion) in e-mobility and €700 million in digitalisation by 2027.

The carmaker will produce the new generation of the Enyaq at the Mladá Bolslav factory and will produce a new electric large family SUV based on the Vision 7S in the Czech Republic, Zellmer announces.

“We have agreed to maintain close communication with the Czech government and continue strategic discussions,” Blume adds.

With the three selected sites, the group will potentially secure 200 gigawatt-hours of battery production capacity. Previous plans called for 240 GWh capacity in Europe “if conditions are right.”

Czech officials were reportedly pushing the companies for a decision, having secured land for the gigafactory in Líně. The land is now expected to be released to other interested projects.