Gotion High-tech and Volkswagen Group plan to pour about €3.22 billion ($3.67 billion) into battery and cathode materials projects in Spain, Slovakia and Morocco, adding a combined 37.5 GWh of annual cell capacity plus 100,000 metric tons of cathode materials output for VW's European supply chain.

The plan, disclosed in a Shenzhen stock exchange filing on Monday, remains an intention rather than a done deal. Gotion's board approved the proposal on September 28, but the companies have not yet signed an investment agreement. The transaction still requires shareholder approval and government clearances in China and overseas.

Gotion (SZSE: 002074) plans to invest about €1.598 billion across the three joint ventures. Volkswagen's battery unit PowerCo would contribute about €1.62 billion, with funding provided in stages.

Valencia anchors the plan

The largest project sits in Valencia, Spain, at the existing PowerCo Spain operation. The partners plan roughly €2.26 billion in investment to build 29.1 GWh of annual lithium-ion battery capacity there.

The structure inverts the usual OEM-majority pattern: Gotion will acquire a 49% stake in PowerCo Spain through a capital increase, while PowerCo retains control with 51%.

In Šurany, Slovakia, the partners plan about €480 million for 8.4 GWh of annual cell capacity. Gotion takes the controlling hand here, holding 51% to PowerCo's 49%.

Cells from both European plants will prioritize Volkswagen's demand in Europe. Specific purchase volumes and supply assurance arrangements, however, remain subject to subsequent definitive agreements — meaning the offtake picture is still open.

Morocco feeds the upstream

A third joint venture in Kenitra, Morocco, would absorb another roughly €480 million to build a lithium iron phosphate cathode materials plant with annual capacity of 100,000 metric tons. Output will prioritize supply to the two battery joint ventures. Gotion again controls with 51%, PowerCo holds 49%.

The construction scope in the filing for all three projects excludes land and factory buildings. Each project is expected to take no more than five years to build, subject to actual construction progress.

Gotion flagged the near-term cost: the projects will increase capital expenditure, and financing conditions, approvals and market changes could affect construction progress and expected returns.

Deepening an existing equity tie

The deal thickens an already tight relationship. Volkswagen (China) Investment Co held a 24.28% stake in Gotion as of September 20, making it the battery maker's largest shareholder.

Gotion said it will participate in developing Volkswagen's key European cell production base, while PowerCo takes stakes in Gotion's battery and materials projects in Europe and Africa to jointly build a localized battery supply network for Europe.

Momentum behind the move

The investment plan lands as Gotion gains ground in the global battery rankings. Its EV battery installations totaled 34.0 GWh in the first seven months of 2026, up 44.2% year over year, according to South Korean market research firm SNE Research.

Gotion ranked fifth globally in the period, with market share rising to 4.7% from 3.9% a year earlier. It trails CATL (39.9%, 289.6 GWh), BYD (14.7%, 106.7 GWh), LGES (8.3%, 60.3 GWh) and CALB (5.1%, 37.3 GWh), and sits ahead of Panasonic (3.6%, 26.2 GWh).

What to watch next: the signing of the definitive investment agreement, shareholder votes, and Chinese and overseas regulatory clearances — the gates that determine whether the 29.1 GWh Valencia expansion and its sister projects move from filing to construction. The definitive offtake agreements with Volkswagen will show how much of the 37.5 GWh is genuinely committed.

($1 = €0.8783)