Volkswagen strengthens ties with Gotion with three joint ventures
Volkswagen is moving even closer to its battery partner Gotion High-tech in Europe: The battery cell factory under construction by VW subsidiary PowerCo in Sagunto, Spain, will become a joint venture project. In return, Gotion is opening the door for Volkswagen on battery projects in Slovakia and Morocco. Whether the mega-deal will go ahead now depends on the relevant authorities.
Image: Gotion High-Tech
Gotion released its stock exchange announcement today — and it packs a punch. The Chinese battery manufacturer and Volkswagen plan to establish three joint ventures, investing a combined €3.22 billion in three related battery projects. All of these major initiatives are already underway. Volkswagen’s subsidiary PowerCo is currently constructing a battery cell factory in Sagunt, near Valencia. Meanwhile, Gotion, through its subsidiary Gotion InoBat Batteries, is building a battery cell factory in Slovakia and a cathode material plant in Morocco.
These three projects, previously pursued independently, will now be placed under the responsibility of new joint ventures between the two parties. This means Volkswagen is opening the door for Gotion to participate in battery cell production in Valencia, though it will retain control with a 51:49 ownership split. In return, Gotion is making Volkswagen an almost equal partner in its major battery projects in Slovakia and Morocco. Here, the ownership structure will be reversed: 51% for Gotion and 49% for Volkswagen. Both sides will act through their respective subsidiaries — Volkswagen via its battery division, PowerCo.
The stock exchange announcement also outlines the €3.22 billion investment across the three projects: €2.26 billion will flow into the Sagunt project, with approximately €480 million each allocated to Slovakia and Morocco. The total sum will be shared almost equally between the joint venture partners. Gotion will contribute around €1.6 billion, while Volkswagen’s PowerCo will invest roughly €1.62 billion. Financing is set to proceed in stages, though no specific timeline has been provided.
Gotion High-Tech emphasises a broader goal of deepening supply chain collaboration for Volkswagen’s European market. The battery projects in Spain and Slovakia are expected to produce battery cells with a combined annual capacity of 37.5 GWh, primarily for Volkswagen. Additionally, the Morocco plant, specialising in LFP cathode materials, aims for an annual capacity of 100,000 tonnes and will mainly supply the two new battery joint ventures in Spain and Slovakia. This reflects Volkswagen’s push for vertical integration in its supply chain.
This set of agreements between VW, PowerCo and Gotion is not new territory. Volkswagen holds approximately a 25% stake in Gotion, making it the largest shareholder in the Chinese company, which ranks among the global top five cell manufacturers. Conversely, Gotion has long been operationally involved with Volkswagen. For example, until the Sagunt battery cell factory is operational, Gotion is supplying unified cells for Spanish-made models such as the ID. Polo or Cupra Raval from its factory in Hefei, China, where series production of these cells began in November 2025. Before this, Gotion already served as a technology partner for the development of the unified cell and the construction of PowerCo’s cell production facility in Salzgitter, with hundreds of Chinese experts reportedly involved in the project.
However, the newly announced mega-deal—featuring three additional joint ventures takes the partnership to a new level. The Sagunt cell factory alone holds immense significance. Alongside Salzgitter and St. Thomas in Canada (with the earliest opening now expected in 2029), it is one of three PowerCo sites aimed at reliably supplying the Group with its own battery cells in the future. That said, as early as July, the Spanish trade journal _La Tribuna de Automoción_reported that Volkswagen’s subsidiary in Spain might transition to a joint venture. As it turns out, their sources were accurate.
In its stock exchange announcement, Gotion now states that the annual production capacity for lithium-ion batteries in Spain is targeted at 29.1 GWh. Before this, PowerCo had consistently cited 40 GWh. Whether this represents an adjustment or if 29 GWh is merely an initial phase tied to the announced investment remains to be clarified in future corporate communications. Regardless of Sagunt, Gotion continues to advance its separate plans for a factory in Valladolid, Spain, where, following recent funding commitments from the Perte-VEC programme, a cathode and battery recycling plant will initially be established.
In Slovakia, Gotion InoBat Batteries (GIB) began constructing a battery factory in Šurany in the south of the country in 2025. At the time, pilot production was scheduled to start in September 2026, with series production following in 2027—though no official updates have been released since. Gotion InoBat Batteries is already a joint venture between Gotion and the Slovakian company InoBat. The Chinese manufacturer holds 80% of GIB’s shares, giving it control over the joint venture. The stock exchange announcement does not clarify what role InoBat will play at the site following PowerCo’s involvement.
The planned production capacity here is also noteworthy, since Gotion states that, with the new joint investment of around €480 million, it aims to achieve an annual production capacity of 8.4 GWh in Šurany. However, in 2025, the company had announced 20 GWh initially, with a long-term target of 40 GWh. This discrepancy remains unresolved for now.
What is clear, however, is that the cells produced at the two European sites will primarily benefit Volkswagen, though the specific volumes and supply guarantees are still subject to final agreements.
Additionally, Gotion’s Morocco plant will be transferred to joint venture ownership. Just a few weeks ago, the African Development Bank granted a €100 million loan to support the construction of the cathode material production facility in the Rabat-Salé-Kénitra free trade zone. In its official statement, the bank reaffirmed in July that the first phase targets an annual capacity of 10 GWh for LFP cathode materials, with a long-term expansion to 100 GWh—though no timeline was provided.
In 2024, Gotion signed an investment agreement with the Moroccan government for the factory as announced and established its 100%-owned subsidiary, Gotion Power Morocco. At the time, an initial annual capacity of 20 GWh was mentioned. In the now widely cited stock exchange announcement, Gotion only references an annual capacity of 100,000 tonnes for the new joint venture era with PowerCo. The company provides no further details on planned output or timelines, merely stating that “the construction period for each project is expected to be no longer than five years, subject to actual progress.”
And this is also subject to all necessary approvals. While Gotion’s board approved the proposal today, 28 September, Chinese media reports indicate that the companies have not yet signed the investment agreement. The transaction still requires approval from shareholders and the relevant regulatory authorities. It remains unclear whether Volkswagen’s management has already given its consent.
Volkswagen’s interest in the mega-deal is understandable, since building its own cell production consumes billions, and Volkswagen is an automaker in crisis. For some time now, the Group has been seeking ways to rein in the investments of its subsidiary, PowerCo. Through its collaboration with Gotion, Volkswagen expects to gain more advantages than disadvantages in financing over the medium to long term.
szse.cn (in Chinese) via cnevpost.com
Update 29 September 2026
Volkswagen Group has now officially confirmed the planned joint venture structure with Gotion High-tech. In a statement, the Wolfsburg-based group specified that the agreement will also cover joint procurement and sales activities in Europe. At the same time, Volkswagen is selling a 5.3 per cent stake in Gotion ‘to optimize equity structures and support long-term strategic synergies‘. The group will therefore retain a stake of around 19 per cent in Gotion.
Thomas Schmall, Volkswagen board member and chairman of PowerCo’s supervisory board, said: “I am delighted that we are expanding our long-standing partnership with Gotion into the joint industrial production of LFP batteries to strengthen Europe’s battery industry. This marks a major breakthrough for both companies and brings us one step closer to the forefront of electric mobility. Volkswagen is the first European automotive manufacturer to cover the entire battery value chain, from development and cathode materials through to production.”
Volkswagen repeatedly highlights its increased focus on LFP batteries in its press release. The chemistry offers competitive costs, a long service life and high robustness, the company says, making it a key technology for affordable electric mobility in the volume segment. Volkswagen points to what it expects to be strong growth in demand in Europe: “According to forecasts, LFP’s market share could rise from around 10 percent today to between 40 and 60 percent by 2030. At the same time, Europe currently has no relevant LFP battery production capacity.” The partnership with Gotion is intended to strengthen Europe’s position in the global LFP battery market.
Against this backdrop, Volkswagen says the PowerCo cell plant in Valencia is to be explicitly expanded ‘into a European production hub for Unified Cells based on LFP technology‘. The 51:49 joint venture is to be ‘jointly managed by PowerCo and Gotion‘. Regarding the cell factory in Slovakia, the group specifies that its focus will also be on LFP cells, ‘both EV applications and energy storage systems (ESS)‘.
As for the financial details, Volkswagen broadly confirms the figures from Gotion’s stock exchange announcement on Monday. PowerCo is expected to invest a total of around €470 million in the Šurany and Kenitra sites by 2030 to acquire a 49 per cent stake in each, the company said. In return, the agreement provides for Gotion to invest around €1.1 billion to acquire a 49 per cent stake in the Valencia site.