Volkswagen Group and Seat to invest €10bn in new Spanish gigafactory

Volkswagen Group and Seat have outlined plans to invest €10 billion (£8.5bn) in the creation of a new gigafactory in Spain.

Located in Sagunto in Valencia, Spain, the gigafactory will have an annual production capacity of 40GWh and will provide batteries to Volkswagen Group’s Martorell and Pamplona factories. Set to occupy 200 hectares and employ 3,000 people by 2030, the site is set to enter the construction phase in the first quarter of 2023. Battery production is set to commence in 2026.

Herbert Diess, CEO of the Volkswagen Group, said: “This investment of 10 billion euros will electrify Spain and Europe’s second-largest automotive manufacturer, creating a battery Gigafactory in Sagunto, enabling the production of electric vehicles at the Martorell and Pamplona plants, and building-up a comprehensive supplier ecosystem. This is the biggest industrial investment ever made in Spain.”

The Sagunto site will be the third of six gigafactories that Volkswagen Group plans to build across Europe, with two already confirmed in Germany and Sweden. Energy for the Valencia gigafactory will come from 100 per cent renewable energies, too, with a 250 hectare solar plant located just over six miles away from the site supplying power. Volkswagen says that in its first phase, 20 per cent of the gigafactory’s total energy will come from here.

Additional funding will also be supplied through the Strategic Project for Economic Recovery and Transformation program (PERTE, in Spanish) for the Electric and Connected Vehicle (in Spanish, VEC).

“The Volkswagen Group, SEAT S.A. and the Spanish Government share a vision: to make Spain a European hub for electric mobility. We are ready to initiate this transformation. The PERTE (just say program instead?) serves as a model for the whole of Spain on how traditional industrial structures can be transformed”, added Diess.