A flagship scheme set up by the Volkswagen Group to cut Europe’s reliance on Asian suppliers could ultimately end up under the control of a Chinese company. That is the scenario reportedly being discussed for PowerCo’s battery-cell gigafactory in Sagunto, Valencia.
According to Spain’s La Tribuna de Automoción, citing industry sources, the Volkswagen Group is in advanced talks with Gotion about the Chinese firm taking a majority stake in the Sagunto gigafactory.
The process is said to have included visits by Gotion’s chief executive, Li Zhen, as well as technical sessions between teams from both companies to assess whether such an arrangement would be viable.
PowerCo’s European battery-cell strategy
The Sagunto plant sits within the Volkswagen Group’s plan to manufacture its own battery cells in Europe, with the explicit aim of reducing dependence on Asian cell suppliers. The original roadmap called for six European gigafactories, although that target has since been cut by half.
Chinese majority?
Based on the sources quoted by the Spanish newspaper-and with no official confirmation so far-the option under consideration would be the creation of a joint venture in which Gotion would hold the majority share.
Scope of the talks: Sagunto only
The discussions are understood to relate solely to the Spanish facility, and would not extend to the rest of PowerCo’s operations.
Asked by Reuters, PowerCo neither confirmed nor denied that negotiations are taking place. The company said only that it routinely reviews strategic opportunities and potential partnerships.
Even so, PowerCo insisted it remains committed to the Sagunto project and that there are no plans to hand over control of the factory. Gotion did not respond to requests for comment.
Any closer alignment between the two groups would not be unexpected. The Volkswagen Group is Gotion’s largest shareholder, holding 25,56% of the company, and the two have maintained a strategic partnership for several years.
Gotion is also among the suppliers selected to provide the unified cells the German group plans to use between 2026 and 2032. Until the Sagunto site comes online, it will continue supplying Volkswagen with cells manufactured in China.
A project facing delays
The Sagunto gigafactory is a cornerstone of the Volkswagen Group’s electrification push across the Iberian Peninsula. Its cells are intended to supply electric models built in Martorell by SEAT, in Navarra by Volkswagen, and in Palmela at Volkswagen Autoeuropa.
However, the programme has run into several setbacks. The start of pre-series production-originally scheduled for September this year-has been pushed back to December.
Recruitment behind target
The hiring plan is also well off the intended pace. Of the roughly 500 new roles planned for 2026, only around 50 are reported to have been filled so far.
If the joint venture goes ahead, Gotion would gain a second industrial foothold in Spain, alongside the project it is already developing in Valladolid: a recycling and cathode-production facility inherited from Slovakia’s Inobat, backed by an investment of more than €950 million.
According to La Tribuna de Automoción, Gotion also wants to use the Sagunto plant to supply cells to other manufacturers operating in Spain, in addition to the various Volkswagen Group brands.
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