The German group intends to start production in 2026 to supply the Martorell and Landaben factories
Volkswagen Group gave the go-ahead on Friday for its battery plant in Sagunto, Valencia. In a protocol agreement in the presence of King Felipe VI and the Head of Government, Pedro Sánchez, the automaker laid the cornerstone of its future factory, from which it will supply battery cells to the car factories located in Martorell (Barcelona) and Landaben (Navarra), from 2026. Preliminary projections indicate that it can manufacture 150 million cells per year, which will allow it to power 500,000 cars. In addition, the company announced on Friday that it sees the potential to increase this production by 50% in the medium term. In this way, the capacity (initial target) of 40 gigawatt-hours (GWh) would go from 60 GWh, or what is the same, to supply 750 thousand vehicles.
Friday’s law is another step in the roadmap announced by the German group in 2021, when it announced its intention to install six giant factories in Europe. Soon after, in March 2022, the manufacturer confirmed that Sagunto would be the chosen location, the second to be announced after Salzgitter, Germany. In January of this year, the plans were accelerated after the purchase of the land where the factory will be built, for 63 million euros.
“This factory represents the commitment to sustainable mobility, industry and an entrepreneurial state in the global market”, emphasized Pedro Sanchez. The Chief Executive highlighted the importance of “the strategic autonomy of Spain and the European Union” to face the challenges of globalization and environmental transformation. He went even further, talking about the possibility of installing chip and microchip factories in the country, noting that in 2022 the country was the sixth largest recipient of foreign investment in the world.
Sanchez insisted on the importance of public assistance in carrying out the project. Last October, the construction of the megafactory was under suspicion by Volkswagen, due to the value that the group would receive from Bertie’s electric car company. Finally, the executive branch decided to double the subsidy granted to the German company to 356.5 million euros for electricity projects in Spain.
The words of President Sanchez, accompanied by the Minister of Industry, Reyes Maroto, and the person in charge of science, Diana Morant, come at a time of great uncertainty for European car manufacturers. Companies are lured by Washington’s generous green subsidies to locate their production in the United States. In early March, the British Financial Times announced that the VW Group was considering moving a huge factory across the Atlantic to be built in Eastern Europe. In that sense, noted Sanchez, these subsidies “distort competition and threaten to divert investment away from Europe.”
In this regard, SEAT President Wayne Griffiths stated during the event that this project “aspires to transform Spain into an electric mobility hub”. For this, the Volkswagen Group’s commitment is “to develop and produce electric cars made in Spain”, as announced by the German company last Wednesday.
Griffiths reiterated that the estimated total investment for the Future Fast Forward initiative is €10,000 million, including the electrification of two power plants in the country. The factory of more than 200 hectares in Sagunto represents almost a third of the total project, with more than 3,000 million euros, which coincides with the presentation of PowerCo, a subsidiary of the German consortium responsible for the battery business, to the Valencian Community.
Mediterranean Energy Corridor
The German manufacturer’s current plans include creating 3,000 jobs, in addition to another 30,000 indirect jobs at suppliers and partners throughout Spain.
The head of the Generalitat Valenciana, Ximo Puig, referred to more than “100 indicators” that Volkswagen took into account before deciding on the location of the second battery factory. In this sense, he highlighted the importance of strengthening the “Mediterranean Energy Corridor”, and highlighted the creation of a training center in Sagunto to train the future staff of the station.
The company highlighted among the most important factors for its decision to locate the industrial center in the Valencian community, the availability of low-cost green electricity, the regional research and innovation cluster, as well as good transport infrastructure.