South Korean automotive components manufacturer Hyundai Mobis announced it had begun construction of a new factory in Spain to produce electric vehicle (EV) battery packs for Volkswagen.

The supplier was spending KRW170bn (EUR120m) on the plant, excluding land and buildings, just outside Pamplona in the Spanish region of Navarre.

It was scheduled to become operational in 2026, supplying batteries packs to Volkswagen whose main Spanish plant is also in Pamplona.

The factory would have capacity for 360,000 battery systems per year by 2030.

Hyundai Mobis is South Korea’s largest automotive components manufacturer, supplying systems and modules mainly to affiliated automakers Hyundai and Kia.

The company was looking to reduce its dependence on the Hyundai group which currently accounted for 90% of its global revenue, and described VW as a key global customer.
Vehicle electrification is a core growth area for Hyundai Mobis which produces battery systems in South Korea, China and the Czech Republic.

Several new factories are under construction in the US and Indonesia.

The company said the new plant in Spain was a significant strategic entry into western Europe.

Jung In-bo, head of the Pamplona project, said in a statement: “We are committed to being VW's long-term [supplier] through stable auto component [shipments] and we will strive to diversify our supply base in Europe, including supplying upcoming models for our client."

Volkswagen has vehicle assembly plants near Pamplona (VW) and Martortel near Barcelona (Seat), making Seat and VW models.

It also has an assembly plant near Lisbon, Portugal.

VW announced last year it planned to spend EUR3bn on its own EV battery plant in Sagunt, just north of Valencia, Spain (the city is home to an electrifying Ford plant) with operations also scheduled to begin in 2026.

It would have capacity for 40GWh of batteries by 2030.