Volkswagen Group, its battery subsidiary PowerCo and China's Gotion have agreed plans for three battery joint ventures in Spain, Slovakia and Morocco with combined estimated investment of approximately €3.22bn ($3.65bn).

Gotion is expected to invest about €1.59bn across the ventures. PowerCo will contribute approximately €1.62bn, including roughly €470m by 2030 for its 49% stakes in the Slovak and Moroccan projects.

The ventures will produce lithium iron phosphate (LFP) battery cells and cathode materials at sites in Valencia, Šurany and Kenitra. The deal extends a partnership that began in 2020 and already covers joint procurement and sales activities in Europe.

Valencia: 29.1GWh under PowerCo control

PowerCo's under-construction gigafactory in Valencia will transfer into a joint venture producing LFP cells with an annual capacity of 29.1GWh. PowerCo will hold 51% and Gotion 49%, keeping the plant a controlled PowerCo subsidiary. Gotion is expected to invest about €1.1bn for its stake.

The Valencia facility is intended to serve as the European production hub for Volkswagen's LFP-based Unified Cells — the cell format at the centre of the group's platform strategy.

Šurany: 8.4GWh for vehicles and storage

Gotion's planned cell factory in Šurany, Slovakia, will also become a joint venture. The facility will have an annual capacity of 8.4GWh and produce LFP cells for electric vehicles and energy storage systems. Here the ownership flips: Gotion takes 51%, PowerCo 49%.

Kenitra: 100,000t of cathode material

In Kenitra, Morocco, the partners plan a facility producing 100,000t of LFP cathode material annually. Gotion will retain 51% and PowerCo 49%. Volkswagen frames the project as a way to diversify supply sources for key cathode active materials.

Executive claims

Thomas Schmall, Volkswagen Group technology management board member and PowerCo supervisory board chairman, called the agreement "a major breakthrough for both companies" that "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," Schmall said.

Gotion chairman Li Zhen said: "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."

VW exits part of its Gotion equity

Separately, Volkswagen Group, through its subsidiary Volkswagen (China) Investment, has entered definitive agreements to sell a 5.3% equity stake in Gotion. The company said its voting rights, board representation, nomination rights and position as a strategic investor would remain unchanged after completion.

Closing conditions

The transactions remain subject to regulatory approvals and customary closing conditions, including approval from Gotion shareholders and governmental approvals in China and overseas. Gotion said implementation would take place in phases.

The announced capacities — 29.1GWh in Valencia, 8.4GWh in Šurany and 100,000t of cathode material in Kenitra — are stated intentions, not confirmed output. What to watch next: the Chinese and overseas government approvals, Gotion shareholder sign-off, and the timing of the Valencia plant's first Unified Cell production under the new joint-venture structure.