The Chinese company Gotion buys 49% of Volkswagen's battery plant in Sagunto

BarcelonaThe Volkswagen Group, PowerCo and the Chinese company Gotion High-Tech have agreed to "deepen their strategic alliance" through a joint venture for the development and operation of the battery cell gigafactory currently under construction in the town of Sagunto (Valencian Community). In this way, the Chinese manufacturer is investing some 1.1 billion euros to obtain 49% of the gigafactory.

The battery plant in Sagunto, which should start operating this year, had planned an investment of about 3 billion euros, with aid from the Spanish government within the PERTE for the electric and connected car. This plant should supply batteries to the Seat plant in Martorell and the Volkswagen plant in Landaben (Navarre). The German consortium is already manufacturing electric cars at both plants: the Cupra Raval and the ID Polo in Martorell, and the ID Cross and the Skoda Epiq in Navarre.

The planned collaboration between the Volkswagen Group and the Chinese company Gotion "enhances the plant's technological capabilities, which represents a new milestone in the industrial development of the project and strengthens its role within the growing European battery value chain," company sources told Europa Press. The agreement signed this Monday maintains PowerCo (Volkswagen Group) with a majority stake of 51% in the Sagunto gigafactory, which guarantees "continuity in the governance, strategic direction and operational oversight of the project." In addition, the investment commitments and employment targets –3,000 jobs– previously announced "remain unchanged".

The same sources point out that as the European automotive industry moves towards electrification, the demand for LFP battery technology (lithium iron phosphate batteries) is expected to grow significantly. According to market forecasts, LFP batteries will be dominant and could represent between 40% and 65% of total demand in Europe by 2030, driven by their competitiveness, safety, durability and suitability for high-volume electric vehicle segments.

Currently, practically all LFP cells used in Europe are manufactured in China. With the joint venture, Volkswagen, PowerCo and Gotion are turning the Sagunto project into a key piece to establish a competitive European production base for this strategically important technology with cells destined for the European market. Its long-term competitiveness is reinforced thanks to a larger scale, manufacturing experience and supply chain resilience.

First phase commitments

The joint venture has been designed to "strengthen the long-term viability and competitiveness of the Sagunto project, while preserving the strategic commitments already made". The investment of more than 2.3 billion euros already in execution and the creation of more than 1,500 direct jobs in the initial phase –which includes the first two production blocks– remain unchanged, thus consolidating the gigafactory's position as one of the most relevant industrial projects currently under development in Europe.

Sagunto will begin operations with two production blocks and a combined annual capacity of up to 30 GWh in a first phase.