Volkswagen Expands Partnership With Gotion to Build LFP Battery Plants in Europe
The deal includes a $1.25 billion stake in a Spanish factory and plans for facilities in Slovakia and Morocco.
Volkswagen Group announced an expanded partnership with Chinese battery maker Gotion on Monday, establishing three joint ventures to build a European manufacturing base for lithium iron phosphate (LFP) batteries.
What Happened
Under the agreement, Gotion will pay $1.25 billion for a 49% stake in PowerCo’s factory in Valencia, Spain. This facility, jointly managed by PowerCo and Gotion, is designated as a "European production hub" for LFP unified cells with a capacity of 29.1 gigawatt-hours. Additionally, Volkswagen plans to spend approximately $535 million through 2030 to acquire a 49% stake in Gotion’s factory in Slovakia and to establish a new cathode-production facility in Morocco. The Slovakian plant, with an 8.4 GWh capacity, will produce LFP cells for vehicles and stationary storage applications.
Why It Matters
Volkswagen is currently undergoing a significant restructuring, cutting jobs and reducing its manufacturing footprint to address high costs and intensifying competition. Despite these challenges, the company maintains substantial electric ambitions centered on a "unified" prismatic battery cell developed by its subsidiary PowerCo. This cell is designed to house various chemistries, including potentially solid-state, and serve vehicles across all VW brands, from Volkswagen to Porsche. The company describes LFP as a "key technology for affordable electric mobility in the volume segment," noting that while LFP currently holds a 10% share in Europe, that figure could rise to 40-60% by 2030. The partnership aims to address the current lack of relevant LFP battery production capacity in Europe.
The Bottom Line
Volkswagen's move aligns with broader global efforts to establish LFP battery production outside of China. In the United States, Ford has licensed technology from CATL for its Michigan cells, and Gotion is supplying cells for the Slate pickup truck. In Europe, competitors like Stellantis and CATL are also building large-scale LFP plants, such as a 50-GWh facility in Zaragoza, Spain, expected to begin production next year.
