If they didn't give out tax credits then they would receive that amount in taxes. From the government's point of view tax credits are a reduction in revenue.
I don't think 10% fewer tax credits would have made the difference of the factory being built or not. VW has plenty of money to pay taxes.
My grandparents live on a farm in rural Canada and have never gotten delivery to their door. They have a PO box at the nearest town which is a 30 minute drive away. They can't even get anything shipped by a courier because non will deliver to a PO box or outside of town. As far as I know it's always worked this way, and nothing is changing there.