Volkswagen, PowerCo, and Gotion are planning three LFP joint ventures
Image: VW (symbolic image)
Volkswagen Group, its subsidiary PowerCo SE, and Chinese partner Gotion High-tech aim to expand their strategic partnership, which has existed since 2020. They have agreed to establish three joint ventures in Valencia, Šurany, and Kenitra for the industrial production of LFP battery cells (lithium-iron-phosphate) and cathode materials. In addition, they will carry out joint procurement and sales activities in Europe.
"I am pleased that we are expanding our long-standing partnership with Gotion to joint industrial production of LFP batteries, thereby strengthening Europe’s battery industry," says Thomas Schmall, member of the Volkswagen Group’s Board of Management for Technology and chairman of PowerCo SE’s supervisory board. "This is a significant breakthrough for both companies. It brings us closer to our goal of taking a leading role in electric mobility. Volkswagen is the first European automaker to cover the entire battery value chain—from development and precursor materials to production."
The PowerCo “gigafactory” under construction in Valencia, Spain, is set to be transformed into a joint venture. PowerCo will hold 51 percent of the shares, while Gotion will take 49 percent and invest around 1.1 billion euros for it. The goal is to develop the site into a European production center for prismatic cells based on LFP technology. The announced investments and measures to create jobs are intended to remain in place.
Gotion’s cell factory in Šurany, Slovakia, is set to be transformed into a joint venture, with Gotion holding 51 percent and PowerCo holding 49 percent. The focus will be on LFP cells for electric vehicles and energy storage systems. Another joint venture for a new production facility for LFP cathode materials is planned in Kenitra, Morocco, where Gotion is also expected to hold 51 percent ownership.
PowerCo will invest a total of around 470 million euros in the Šurany and Kenitra sites by 2030 to acquire 49 percent of the shares in each location. The three joint ventures will be jointly managed by PowerCo and Gotion, with the partners sharing investments and industrial responsibilities. The agreement is still subject to regulatory approvals and standard closing conditions, including Gotion’s shareholders’ approval.
The companies describe LFP batteries as offering competitive costs, long lifespan, and high durability. Projections suggest their market share in Europe could rise from around 10 percent currently to 40 to 60 percent by 2030. At the same time, there are currently no significant production capacities for LFP batteries in Europe.
Independent of the joint ventures, Volkswagen has reached binding agreements to sell a 5.3 percent stake in its holding company Gotion. The intended transaction is not meant to reduce Volkswagen’s voting rights at Gotion. Its representation on the Board of Directors and other nomination rights are also set to remain unchanged. Once completed, Volkswagen plans to continue acting as a strategic investor in Gotion, though this sale is also subject to any required regulatory approvals.
Frank Blome, CEO of PowerCo SE: “Volkswagen and PowerCo are building Europe’s battery industry. The partnership with Gotion is the next milestone on this path: it strengthens the resilience of our value chain, accelerates industrialization, and combines PowerCo’s expertise with the strengths of a long-term partner.”
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Thomas Langenbucher is an expert in electromobility with experience in the automotive and financial industries. Since 2011, he has been covering electric vehicles, sustainable technologies, and mobility solutions for ecomento.de. Learn more.
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