VW settles on location for Spanish battery plant

Volkswagen has decided on the location for the Volkswagen Group’s battery cell factory in Spain: it is to be built in Sagunt in the province of Valencia in eastern Spain and will have a capacity of 40 GWh per year.

VW had announced its intention to build a battery factory in Spain at the strategy presentation in July 2021 for 2030 called ‘New Auto’. With Sagunt, the exact location has now apparently been determined.

The decision for Sagunt is “95% made”, an official announcement could be made in the coming weeks. The project has a planned investment of around 3.5 billion euros and could create around 3,500 jobs. According to unnamed sources, VW will not announce its choice for Sagunt until the tender for the Spanish PERTE funding has been published. This is to be the case next week at the latest.

Through this funding program, Spain plans to invest a total of 4.3 billion euros by 2023 to boost the production of electric vehicles and batteries in the country. The program is to be financed mainly from the EU’s reconstruction fund. A further €19.7 billion in investment is to be made by the private sector by 2023, triggered by government funding.

The choice of Sagunt as the location comes as little surprise. VW, for example, is aiming to manufacture small electric cars at the Martorell plant, among others. Electric SUVs are to be built in Pamplona. At a press conference last December, however, Herbert Diess did not yet specify any concrete brands or models. He said that both locations were still “under review” and that a decision would also depend on funding commitments.

Volkswagen is also said to have chosen Sagunt because VW and Ford already reached an agreement in June 2020 for Ford electric vehicles based on the MEB platform. The battery plant in Sargunt could therefore supply not only the VW Group’s Spanish plants, but also the Ford plant in Almussafes on the outskirts of Valencia.

As is well known, Volkswagen is planning to build six gigafactories in Europe in order to meet the Group’s increasing cell demand. The Swedish company Northvolt is responsible for the first factory, which is to produce the unit cells for the premium segment. In 2025, a second cell production facility is to start in Salzgitter: The gigafactory in Lower Saxony will produce unit cells for the volume segment of the Volkswagen Group. The locations of battery factories 3 and 4 are to be determined in the first half of 2022; Spain and Eastern Europe have been under discussion here so far. However, Spain could now be the third battery factory, which would make it the fourth production site in Eastern Europe. Possible locations for factories 5 and 6, which are to be built by 2030, have not yet been named.

With reporting by Daniel Bönninghausen, Germany.

elpais.com, latribunadeautomocion.es (both in Spanish)