Three battery joint ventures at once: Volkswagen forms a close partnership with Gotion
Volkswagen is moving closer in Europe to its Chinese battery partner Gotion High-tech: The battery cell factory being built by VW’s subsidiary PowerCo in Sagunt, Spain, will become a joint-venture project. In return, Gotion is opening doors for Volkswagen in battery projects in Slovakia and Morocco. Whether this mega-deal will go through now depends on shareholders and authorities.
Image: Gotion High-Tech
Gotion released its stock market announcement on Monday — and it’s quite significant: the Chinese battery manufacturer plans to establish three joint ventures with Volkswagen, along with a combined investment of 3.22 billion euros in three related battery projects. All these major initiatives are already underway: Volkswagen’s subsidiary PowerCo is currently building a battery cell factory in Sagunt near Valencia. Meanwhile, Gotion is constructing a battery cell factory in Slovakia through its subsidiary Gotion InoBat Batteries, and is also building a cathode material factory in Morocco on its own.
These three projects, which have been pursued independently so far, will now fall under the responsibility of new joint ventures between the two parties. In other words, Volkswagen is opening the door for Gotion to enter battery cell production in Sagunt near Valencia, but will retain control with 51% ownership compared to Gotion’s 49%. In return, Gotion makes Volkswagen a nearly equal partner in its large-scale battery projects in Slovakia and Morocco. There, the ownership structure is reversed: 51% for Gotion and 49% for Volkswagen. As contractual partners, both sides will send in their subsidiaries—Volkswagen’s battery subsidiary, PowerCo, in this case.
2.26 billion euros alone for the Spanish plant
The investments of around 3.22 billion euros in these three projects, also mentioned in Gotion’s press release, are allocated by the Chinese partner as follows: 2.26 billion euros alone will go into the large-scale project in Sagunt, with approximately 480 million euros each for Slovakia and Morocco. The total amount is divided almost equally between the two joint venture partners: Gotion will contribute around 1.6 billion euros, while Volkswagen’s battery division, PowerCo, will contribute around 1.62 billion euros. Additionally, financing is planned to occur in stages, with no specific timeline given.
Gotion High-tech generally emphasizes its desire to deepen cooperation within the supply chain for Volkswagen’s European market: The battery projects in Spain and Slovakia are intended to produce battery cells with a combined annual capacity of 37.5 GWh, which will primarily be supplied to Volkswagen. The LFP cathode material factory in Morocco is also set to reach an annual capacity of 100,000 tons, mainly supplying the two new battery joint ventures in Spain and Slovakia. Thus, Volkswagen relies on vertical integration of its supply chain here.
Gotion has proven itself to be a reliable partner
It is clear that a partnership between VW, PowerCo, and Gotion represents no new ground in terms of industry practices: Volkswagen is the largest shareholder in the Chinese company, holding around a quarter of its shares, and the firm ranks among the top 5 cell manufacturers globally. Conversely, Gotion has already been in business with Volkswagen operationally for some time. For example, while the battery cell factory in Sagunt is not yet operational, Gotion supplies the prismatic cells for models produced in Spain such as the ID.3 and Cupra Raval, which are currently sourced from its factory in Hefei, China, where mass production of these cells began in November 2025. Previously, Gotion had already served as a technology partner for the development of the prismatic cell and the construction of PowerCo’s cell manufacturing plant in Salzgitter. Hundreds of Chinese specialists are said to have been involved in this project.
The partnership now reaches a completely different level with the newly announced mega-deal involving three additional joint ventures. The cell factory in Sagunt alone holds immense significance. Along with Salzgitter and St. Thomas in Canada (where, according to new information, operation is set to begin in 2029), it is one of three sites for PowerCo, designed to reliably supply the company with its own battery cells in the future. Spanish industry magazine “La Tribuna de Automoción” reported as early as July that Volkswagen’s subsidiary in Spain might shift to a joint venture. It now turns out their sources were reliable.
Plans for Valladolid remain unaffected by the deal
The Gotion press release states that Spain now aims for an annual production capacity of 29.1 GWh for lithium-ion batteries. In its previous plans, PowerCo had always mentioned 40 GWh. Whether adjustments will be made at this point or whether the 29 GWh represents only a preliminary phase related to the stated investment amount will likely become clear through further company communications. Independent of Sagunt, Gotion is also advancing its separate plans for a factory in Valladolid, Spain, where, thanks to recent funding commitments from the Perte-VEC program, a facility for cathode and battery recycling is set to be built first.
Next, let’s look at Slovakia: There, Gotion InoBat Batteries (GIB) began construction of a battery factory in Šurany, in the south of the country, in 2025. The start of pilot production was estimated at September 2026, with mass production set for 2027 — however, there are no official updates on this yet. It is clear that Gotion InoBat Batteries is a joint venture between Gotion and the Slovak company InoBat. The Chinese manufacturer holds 80 percent of GIB’s shares and thus has control over the joint venture. The stock exchange announcement does not clarify what role InoBat will play going forward with PowerCo’s involvement at the site.
Specific purchase volumes will be negotiated later
An interesting point here is also a look at the planned production capacity: Gotion states that it aims to achieve an annual production capacity of 8.4 GWh at Šurany with the new joint investment of around 480 million euros. However, 20 GWh was planned for 2025, with even 40 GWh envisioned in the long term. This contradiction remains unresolved as well. What is undisputed, however, is that the cells produced in these two European projects will primarily benefit Volkswagen, although the specific volumes and supply guarantees still depend on the conclusion of future final agreements.
The Gotions plant in Morocco will also be transferred into joint-venture ownership as a precursor factory. Just a few weeks ago, the African Development Bank provided a loan of 100 million euros to support the construction of the cathode material production facility in the Rabat-Salé-Kénitra free trade zone. In its official statement in July, the bank reiterated that the initial target was an annual capacity of 10 GWh for LFP cathode materials, with long-term plans to expand this capacity to 100 GWh — though no timeline was specified.
All battery factories are expected to be operational within 5 years
We recall that in 2024, Gotion signed an investment agreement with the Moroccan government for the factory and established its 100-percent subsidiary, Gotion Power Morocco. At that time, the initial annual capacity was mentioned as 20 GWh. In the now-frequently cited stock market announcement by the Chinese company, no target annual capacity is specified for the new joint venture era with PowerCo; instead, only an output volume of 100,000 tons per year is mentioned. Gotion does not provide further details regarding either the planned output or the timeline. As the only clue, the company states that “the construction time for each project is expected to be no longer than five years, subject to the actual progress of construction.”
And this is also subject to all necessary approvals. Although Gotion’s board approved the proposal on September 28th, according to Chinese media reports, the companies have not yet signed the investment agreement. Therefore, the transaction still requires approval from shareholders and the relevant regulatory authorities. It is unclear whether Volkswagen’s management has already given its consent.
The Wolfsburg-based company’s interest in this mega-deal is understandable: establishing its own cell production facility costs billions, and Volkswagen is an automaker in crisis. For some time now, the company has been seeking ways to control the investments of its subsidiary PowerCo. Volkswagen now expects more advantages than disadvantages in terms of financing in the medium to long term from cooperating with Gotion.
szse.cn (in Chinese) via cnevpost.com