Seat receives almost half of Spain’s PERTE grant

Spain’s Ministry of Industry has made public the distribution of state aid for the first call of the eMobility funding programme PERTE. In total, the government is distributing 877.2 million euros to ten funding recipients – almost 300 million euros more than previously planned.

The Spanish acronym PERTE stands for “Strategic Project for Economic Recovery and Transformation”. According to the Ministry of Industry, the public funds of the first funding round are to mobilise total investments worth 2.25 billion euros in the sector. The funding will go to ten projects, with Volkswagen subsidiary Seat receiving by far the largest share with around 397 million euros for the “Future: Fast Forward” initiative. The initiative includes, among other things, the electrification of the factories in Martorell and Pamplona and the creation of a battery ecosystem for electric cars in Spain, including the battery factory near Valencia.

But first things first: Spain reckons it has a good chance of becoming one of the major European production countries for electric vehicles and batteries. In mid-2021, the government announced its intention to invest a total of 4.3 billion euros in several tranches by 2023 to boost production in the country. At the time, the government in Madrid announced that the programme would be financed mainly from the EU’s reconstruction fund. With state support, the country hopes to trigger private-sector investment of 19.7 billion euros by 2023. The new industry is to create up to 140,000 new jobs and the entire car industry is to account for 15 per cent of Spain’s economic output in 2030, it was further announced in the summer of 2021.

So with subsidies of almost 880 million euros, things are now getting underway. In addition to Seat, other recipients of funding are Mercedes-Benz Spain (rounded 170.5 million euros), Hub Tech Factory (108 million euros), Opel Spain (52 million euros), Renault Spain (40 million euros), Sapa Operaciones (33 million euros), Faurecia Interior Systems SALC Spain (28 million euros), Irizar (24 million euros), Peugeot Citroen Automoviles Spain (15 million euros) and Fagor Electronica (9 million euros).

According to the ministry, the companies will receive the money before the end of the year. In addition, more than two billion euros are to be paid out in the PERTE subsidy round that will now follow, according to Reuters.

For Spain’s Industry Minister Reyes Maroto, the ten projects show Spain’s great potential to take a leading role in electromobility in Europe. “The 10 projects funded in this first PERTE VEC call show the great potential that Spain has to lead electromobility in Europe and reinforce the Government’s commitment to support the transformation of the automotive industry towards more sustainable mobility. From the Ministry we will continue working to make more public resources available to the sector to accompany the significant investments that our business ecosystem has to make to electrify its production chain and new global players who want to invest in our country.”

According to Reuters, Volkswagen now intends to analyse the ministry’s decision to discuss whether the planned investment projects can be realised at their maximum scale. The news agency cites an official statement by the German carmaker. Previously, there had been media reports that Volkswagen had threatened to curb its plans for Spain if the amount of funding was too low.

As part of its ‘Future: Fast Forward’ initiative, Volkswagen subsidiary Seat announced in May that it intended to invest ten billion euros in its own plants in Spain and in the development of a local supply chain. Even at that time, however, Seat stressed that the investment was dependent on a positive PERTE funding decision. The Spanish Volkswagen brand would use the funds to convert its vehicle plants to electric vehicle production, set up a comprehensive supplier system and, above all, realise the battery factory in Sagunt near Valencia on the planned scale. Construction of the battery factory with an annual production capacity of 40 gigawatt-hours is scheduled to begin in the first quarter of 2023. The start of production is planned for 2026. Seat submitted the PERTE application in May together with 62 companies from various industries in 11 regions of Spain.

reuters.com, mincotur.gob.es (in Spanish)