German car company Volkswagen will invest €10 billion ($10.6 billion) to launch electric vehicle and EV battery manufacturing in Spain, Herbert Diess said on Thursday. Volkswagen had previously committed to a €7 billion investment but additional funds were added after more partners pledged more money.
Volkswagen said it will build a battery plant and invest in producing EVs at its two car factories in Spain. “We will electrify the second-largest car producer in Europe (Spain) with a new giga-factory of batteries and the production of electric cars in two plants,” Diess said, according to Reuters. Volkswagen eventually plans to establish “a full ecosystem of suppliers from lithium extraction to the assembly of batteries.”
Volkswagen sold ~99k EVs out of 1.9M in Q1, seeks to gain 10% market share in North America by 2030
VW plans to begin building a 40-gigawatt-hour plant in Spain in Q1 2023, and production is set to begin by 2026. By 2030, Volkswagen will employ more than 3,000 workers at the plant, it said.
Electric vehicle companies are now beginning to indulge in more portions of the EV supply chain to limit production and supply chain bottlenecks due to parts and material shortages. After COVID-19 and the Russian invasion of Ukraine showed numerous shortcomings in the global supply chain, automakers started becoming more involved in the production of their electric cars from start to finish. Now that more legacy automakers are becoming more committed to electric powertrains and are attempting to ramp manufacturing capacities to catch up to industry leader Tesla, car companies are becoming experts in supply chain and battery cell manufacturing.
Volkswagen will invest €3 billion in a plant in Sagunto, Spain, and another €3 billion in four SEAT factories, including the Martorell plant near Barcelona, and another €1 billion in Pamplona.
The automaker also said it established a partnership with Iberdrola, Spain’s largest power utility. The company will set up a solar park to partially power Volkswagen’s battery plant, which will be built in the municipality of Sagunto near Valencia.
Last week, Volkswagen announced a strategic partnership with bp to roll out up to 4,000 fast-charging electric vehicle charge points in Germany and the United Kingdom within the next two years.
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