Volkswagen Group, PowerCo SE and Gotion High-tech plan three joint ventures to produce LFP battery cells and cathode material in Spain, Slovakia and Morocco, with Gotion investing about $1.25 billion (€1.1 billion) for a 49% stake in PowerCo’s Valencia gigafactory. The agreement, announced by the Volkswagen Group this week, expands a cooperation that began in 2020 and also covers joint procurement and sales activities in Europe. Separately, Volkswagen has signed definitive agreements to sell a 5.3% equity stake in Gotion and will remain a significant shareholder.
Highlights
- Three joint ventures at Valencia (Spain), Šurany (Slovak Republic) and Kenitra (Morocco) will produce LFP battery cells and cathode material.
- About $1.25 billion (€1.1 billion) from Gotion buys a 49% stake in the Valencia site.
- About $534 million (€470 million) from PowerCo by 2030 buys 49% stakes in the Šurany and Kenitra sites.
- 5.3% equity stake in Gotion will be sold by Volkswagen without reducing the voting rights it exercises.
Why Is Volkswagen Building LFP Capacity in Europe?
According to the company, LFP batteries offer competitive costs, a long service life and high robustness, which make them a key technology for affordable electric vehicles in the volume segment. Volkswagen cites forecasts that LFP’s European market share could rise from around 10% today to between 40% and 60% by 2030. The company also says Europe currently has no relevant LFP battery production capacity.
The partners plan to expand regional LFP production and diversify supply sources for key cathode active materials. Volkswagen says the move is meant to strengthen supply security and the competitiveness of the European battery industry.
LFP Battery Production Across Three Sites
Gotion is already a cell supplier to the Volkswagen Group and a strategic partner of PowerCo. Under the new agreement, the partners will share investments and industrial responsibilities across the three sites. Volkswagen says the deal supports its long-term plan for a European battery supply chain and PowerCo’s growth plan.
| Site | Output | Majority shareholder | Management |
|---|---|---|---|
| Valencia, Spain | LFP battery cells (Unified Cells) | PowerCo, 51% | PowerCo and Gotion jointly |
| Šurany, Slovak Republic | LFP cells for EVs and energy storage systems | Gotion, 51% | PowerCo and Gotion jointly |
| Kenitra, Morocco | LFP cathode material (new facility) | Gotion, 51% | PowerCo and Gotion jointly |
Valencia, Spain
The PowerCo gigafactory under construction in Valencia is expected to transfer to the joint venture, and PowerCo will remain the majority shareholder. A major goal is to turn the site into a European production hub for Unified Cells based on LFP technology. The company says planned investments and job creation measures remain as previously announced.
Šurany, Slovak Republic
Gotion’s existing cell factory in Šurany is expected to transfer to a joint venture in which Gotion holds the majority. Production will focus on LFP cells for both EV applications and energy storage systems.
Kenitra, Morocco
The Kenitra joint venture plans to build a new facility for LFP cathode material. According to the release, the plant is meant to diversify supply of key cathode active materials, increase supply security and expand the regional value chain.
Financial Terms and the Gotion Stake Sale
PowerCo is expected to contribute about $534 million (€470 million) in total to the Šurany and Kenitra sites by 2030 for its 49% stakes. Gotion is expected to invest about $1.25 billion (€1.1 billion) for its 49% stake in Valencia. The agreement still requires regulatory approvals and customary closing conditions, including approval by Gotion’s shareholders’ meeting.
Volkswagen will sell the 5.3% Gotion stake through its subsidiary Volkswagen (China) Investment Co., Ltd. (VCIC). The company says the sale is meant to optimize shareholding structures and support long-term strategic synergy. Volkswagen had previously agreed not to exercise voting rights on part of its shareholding, so the sale will not reduce the voting rights it exercises in Gotion. Its board representation and other nomination rights are unaffected, and it will remain a strategic investor. The transaction requires all regulatory clearances.
What Executives Said
Thomas Schmall, Member of the Board of Management of Volkswagen Group for Technology and Chairman of the Supervisory Board of PowerCo SE, said: “I am delighted that we are expanding our long-standing partnership with Gotion into the joint industrial production of LFP batteries to strengthen Europe’s battery industry. 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.”
Li Zhen, Chairman of Gotion High-tech, said: “Six years of close collaboration between Volkswagen and Gotion have built deep mutual trust and a relationship that empowers both sides—one that has long since moved beyond ordinary business to become a partnership bound by a shared future. Today, together with Volkswagen Group and PowerCo, we are accelerating our global strategic cooperation. 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.”
Frank Blome, CEO of PowerCo SE, said: “Volkswagen and PowerCo are building Europe’s battery industry. The partnership with Gotion is the next milestone on this path: It strengthens the resilience of our value chain, accelerates industrialization and combines PowerCo’s capabilities with the strengths of a long-standing partner.”
