Confirmed! Volkswagen will build battery factory

Volkswagen has finally been given the go-ahead to public aid from PERTE, guaranteeing its investment in the battery factory in Sagunto (Valencia).

After having had some setbacks and remaining in the air at times, the Volkswagen Group, through SEAT SA, has confirmed that it accepts the agreement with the Spanish Executive and will continue with the battery factory project located in the Valencian town of Sagunto.

The Volkswagen Group will continue with the battery factory for electric cars that it plans to build in Sagunto (Valencia), after overcoming differences with the Spanish Executive and accepting the aid assigned by the Ministry of Industry. Both parties finally reached an agreement, after Volkswagen even made a threat to escape from the Spanish factory.

Last month the Spanish government announced that Volkswagen and SEAT would receive 397.3 million euros of public funds, almost half of the total of 877 million available for the first phase of PERTE for the electric and connected vehicle, a financing program to promote the electric vehicle industry that has recovery funds from the European Union.

However, last week, Wayne Griffiths, president of SEAT SA, issued a statement expressing the company’s discontent in considering the public funds allocated to the project “insufficient”. In the statement, he proposed to create a dialogue table to find a more convenient solution for the interests of the German multinational “within 10 days.”

Said and done, both parties have finally reached an agreement. “SEAT SA, the Volkswagen Group, Powerco, and the companies involved in the ‘Future: Fast Forward’ project have accepted the PERTE VEC resolution and together we will invest 10,000 million euros in Spain,” said the president of SEAT and Cupra, Wayne Griffiths.

Cupra Urban Rebel

Volkswagen and SEAT have accepted the almost 400 million euros of aid, emphasizing that it is “a first step” in the search for more solutions to continue developing their plan. The German consortium hopes that further state and regional public aid will materialize to carry out the Spanish project. In an appearance before the media, the president of the Generalitat Valenciana, Ximo Puig, has said that the central government will disburse an additional 230 million, of which between 95 and 110 million will go to the Valencian battery factory.

Those almost 400 million euros will go to the construction of the battery factory and also to other projects to manufacture electric vehicles in the Martorell (Barcelona) and Landaben (Navarra) plants, in which a total of 60 other companies are linked to the industry. Volkswagen  plans to invest 10,000 million euros in our country to turn Spain “into a European center for the production of electric vehicles and batteries.” 

From now on, there are five working days to present the required guarantees and be able to receive the money from the European Next Generation funds. Of the total initially agreed 213 million euros in direct aid.

Of the 10,000 million euros of investment, more than 3,000 million will go to the Sagunto battery gigafactory. It will have a production capacity of 40 GWh per year, will provide 3,000 direct jobs, and will be responsible for manufacturing batteries with unified cells, a key technology in the Volkswagen Group’s strategy. Works are scheduled to start in 2023 and it will be fully operational in 2026.

The batteries produced in the Sagunto factory will be installed in the electric cars manufactured in Martorell and Landaben. Starting in 2025, the two Spanish plants will manufacture small electric cars for the group’s different brands (Skoda, Cupra, Volkswagen). The  Cupra Urban Rebel, the Skoda Elroq, and the  Volkswagen ID.2 are some of the electric models that are expected to be manufactured in Spain.

Elenor Kling

A tech lover and generally a car enthusiast who likes to do a lot of research and share knowledge.

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