Gotion invests $1.25 billion in Volkswagen battery plant in Spain
German automaker Volkswagen and Chinese battery manufacturer Gotion High-Tech are expanding their cooperation in electric vehicle battery production. Gotion will invest €1.1 billion (around $1.25 billion) in the PowerCo plant in Valencia, Reuters reported. Following the transaction, the Chinese company will hold a 49% stake in the factory, while Volkswagen will retain a majority stake.
The Valencia plant will specialize in producing lithium iron phosphate (LFP) cells. The technology is primarily used in lower-cost electric vehicles because LFP batteries do not require nickel or cobalt, and their production can be cheaper than some other battery technologies.
The transaction is part of a broader agreement to build a European battery supply chain. Volkswagen, through its PowerCo subsidiary, will invest €470 million in two Gotion-owned facilities.
The first is a cell manufacturing plant in Šurany, Slovakia. The second will be a new cathode materials facility in Kenitra, Morocco. PowerCo will acquire a 49% stake in each project. As a result, the two companies will cooperate across several stages of the battery production chain, from cathode materials and cell manufacturing to the plant in Spain.
Volkswagen has been a strategic partner of Gotion for several years. The German automaker remains the Chinese company's largest single shareholder, holding a 24% stake.
