Volkswagen, PowerCo, and Gotion Expand Partnership to build Europe's first large‑scale LFP battery supply chain
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Volkswagen Group, its battery subsidiary PowerCo SE, and long‑time partner Gotion High‑tech have announced a major expansion of their strategic cooperation, signing an agreement to jointly industrialize lithium‑iron‑phosphate (LFP) battery production across Europe and North Africa. The move marks one of the most significant steps yet in Volkswagen's plan to secure a resilient, cost‑competitive battery supply chain for its future electric vehicles.
The companies will establish three joint ventures at key sites in Valencia (Spain), Šurany (Slovak Republic), and Kenitra (Morocco), each focused on a different part of the LFP value chain. In Valencia, PowerCo's gigafactory - currently under construction - will be transferred into a joint venture in which PowerCo holds a 51% stake. The site is intended to become Europe’s main production hub for Unified Cells based on LFP chemistry.
In Šurany, Gotion will hold the majority stake (51%) as its existing cell factory becomes part of a joint venture producing LFP cells for both electric vehicles and energy‑storage systems. Meanwhile, the Kenitra venture will build a new facility dedicated to producing cathode active materials, diversifying supply sources and strengthening regional value creation.
Volkswagen describes the agreement as a breakthrough for Europe's battery industry. LFP cells - known for competitive costs, long service life, and high robustness - are expected to grow from roughly 10% of Europe's EV battery market today to as much as 40-60% by 2030. Yet Europe currently has no significant LFP production capacity. By partnering with Gotion, Volkswagen aims to close that gap and secure long‑term supply for its volume EV segment.
Financial commitments reflect the scale of the initiative. PowerCo plans to invest around €470 million across the Šurany and Kenitra sites by 2030, while Gotion will invest approximately €1.1 billion to acquire its 49% stake in the Valencia hub. All ventures will be jointly managed, combining PowerCo's industrialization expertise with Gotion's deep LFP know‑how.
The agreement also includes joint procurement and sales activities in Europe, further integrating the companies’ operations. Separately, Volkswagen will sell a 5.3% equity stake in Gotion to optimize shareholding structures, though its voting rights and board representation remain unchanged.
Executives from all three companies framed the expanded partnership as a decisive step toward building a competitive European battery ecosystem. With regulatory approvals pending, the joint ventures are expected to accelerate Volkswagen's long‑term electrification strategy and anchor LFP technology as a core pillar of its future EV lineup.
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