Volkswagen Group, PowerCo and China’s Gotion have agreed plans for three battery joint ventures in Spain, Slovakia and Morocco, involving combined estimated investment of approximately €3.22bn ($3.65bn).
Gotion is expected to invest about €1.59bn, while PowerCo – Volkswagen’s battery manufacturing subsidiary – will contribute approximately €1.62bn.
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The ventures are planned to produce lithium iron phosphate (LFP) battery cells and cathode materials in Valencia, Šurany and Kenitra.
Volkswagen Group technology management board member and PowerCo supervisory board chairman Thomas Schmall said: “This marks a major breakthrough for both companies and brings us one step closer to the forefront of electric mobility.
“Volkswagen is the first European automotive manufacturer to cover the entire battery value chain, from development and cathode materials through to production.”
In Valencia, PowerCo’s under-construction gigafactory is expected to transfer into a joint venture producing LFP cells, with an annual capacity of 29.1GWh.
PowerCo will hold 51% and Gotion 49%, making the venture a controlled PowerCo subsidiary.
Gotion is expected to invest about €1.1bn for its stake.
The Valencia facility is intended to serve as a European production hub for Volkswagen’s LFP-based Unified Cells.
Gotion’s planned cell factory in Šurany will also transfer into a joint venture.
The facility will have an annual capacity of 8.4GWh and produce LFP cells for electric vehicles and energy storage systems. Gotion will own 51%, with PowerCo holding 49%.
In Kenitra, the companies plan to establish a facility producing 100,000t of LFP cathode material annually. Gotion will retain a 51% stake, while PowerCo will own 49%.
The project is intended to diversify supply sources for key cathode active materials.
PowerCo is expected to contribute approximately €470m to the Šurany and Kenitra projects by 2030 for its 49% stake in each project.
The agreement extends a partnership that began in 2020 and covers joint procurement and sales activities in Europe.
The transactions remain subject to regulatory approvals and customary closing conditions, including approval from Gotion shareholders and governmental approvals in China and overseas.
Gotion said implementation would take place in phases.
Volkswagen Group, through its subsidiary Volkswagen (China) Investment, has also entered definitive agreements to sell a 5.3% equity stake in Gotion.
The company said its voting rights, board representation, nomination rights and position as a strategic investor would remain unchanged after completion.
Gotion chairman Li Zhen added: “Through cross-shareholdings and three joint sites, we are anchoring our shared strategy to localise battery production in Europe, racing to seize the opportunities of global electric mobility, and jointly forging a new paradigm of world-class, win-win cooperation in the lithium battery industry.”
