Volkswagen’s battery company, PowerCo, begins building new Spanish cell factory

Volkswagen’s battery company, PowerCo, begins building new Spanish cell factory

(IN BRIEF) PowerCo, a subsidiary of Volkswagen Group, has started building its second cell factory, called Gigafactory Valencia, in the Spanish region of Valencia. The cell factory is expected to start production in 2026 and will have an initial production capacity of 40 GWh per year with the potential to expand to 60 GWh in the future. The factory will supply unified cells to vehicle plants in Martorell and Pamplona. The site will cover an area of around 130 hectares in Sagunto, in the immediate vicinity of Valencia, with a supplier park built parallel to the PowerCo factory. The company aims to produce sustainable batteries with green electricity generated by solar and wind power. The investment is part of Volkswagen’s 10 billion euro program called “Future: Fast Forward” which aims to electrify its car factories in Martorell and Pamplona as part of the PERTE program for electric and connected vehicles.

(PRESS RELEASE) WOLFSBURG, Germany, 18-Mar-2023 — /EuropaWire/ — PowerCo SE is taking the next step in building its global battery business: In the Spanish region of Valencia, the company gave the starting signal for construction of its second PowerCo cell factory in the presence of His Majesty King Felipe VI, Spain’s President Pedro Sánchez and Ximo Puig, President of the Valencian Generalitat. Gigafactory Valencia will start production of the unified cell in 2026 and will directly employ more than 3,000 people in the future, with a further up to 30,000 indirect jobs potentially being created at suppliers and partners in Spain according to a recent study. The Volkswagen Group has made battery technology a core element of its NEW AUTO strategy and has established PowerCo, a separate battery company. Since its launch in July 2022, PowerCo has decided three sites for cell factories: Salzgitter, Valencia and St. Thomas in Ontario/Canada, two of them already under construction.

The Spanish President Pedro Sánchez: “The factory that will be built here exemplifies the Spanish Government’s commitment to innovation and sustainable mobility. It is a sign of our commitment to industry, but also to the characteristics that define an entrepreneurial nation in the global market: innovation, territorial cohesion and public-private cooperation.”

Thomas Schmall, Board of Management member responsible for Group Technology and Chairman of the Supervisory Board of PowerCo SE: “We are moving into the fast lane with PowerCo. We have just broken ground for PowerCo’s second gigafactory in Valencia, and are already making the next step with the announcement of another gigafactory in St. Thomas, Canada. Our objective is to make PowerCo a global player in the battery business and pave the way for better mobility with sustainably manufactured battery cells. The gigafactory Valencia is an important milestone in that.”

Frank Blome, CEO of PowerCo: “Like the Volkswagen Group, PowerCo stands for responsible conduct. That includes good working conditions, care for the environment and sparing use of scarce resources. We want to be a good neighbour to the people in the region and make a significant contribution to economic development. Not only will we create more than 3,000 jobs of the future, but we also intend to work with the regional government to initiate targeted projects aimed at strengthening science and society.”

Gigafactory Valencia: Potential for 60 GWh

The annual production capacity is initially 40 GWh, but has the potential to be expanded to 60 GWh in the future. The cell factory is being built over an area of around 130 hectares in Sagunto, in the immediate vicinity of Valencia. Together with the planned supplier park, which will be built parallel to the PowerCo factory, the area even amounts to 200 hectares. Important factors in deciding to build the site in Valencia included the availability of low-cost green electricity, the regional research and innovation cluster, as well as the good transport infrastructure and proximity to the Group’s Spanish production sites. The Valencia gigafactory will supply unified cells to the vehicle plants in Martorell and Pamplona, among others.

The President of the Generalitat Valenciana, Ximo Puig, thanked the Volkswagen Group and SEAT for their commitment to Sagunto and the Valencian community: “Mission Valencia stands for a productive alliance between PowerCo, the Generalitat, and the governments of Spain and Europe on the path towards a sustainable transition in mobility. Looking forward, we have the Valencian Community behind us to accelerate our ambitious work with full confidence in what we can achieve when we act together.”

PowerCo is aiming to manufacture sustainable batteries in Valencia. The cell factory will be supplied completely with green electricity generated by solar and wind power, for instance by a new 250-hectare solar farm in the immediate vicinity. The raw material cycle will be closed directly on the site of the cell factory

10 billion investment programme for the electrification of Spain

Gigafactory Valencia is a core component of the 10 billion euro investment programme called “Future: Fast Forward” which the Volkswagen Group announced last year together with PowerCo, its Spanish subsidiary SEAT S.A. and 49 partners. Under the plan, Volkswagen will also electrify its car factories in Martorell and Pamplona as part of the PERTE programme for electric and connected vehicles.

PowerCo bundles the Volkswagen Group’s global battery business throughout the value chain – from raw material supply and development to the construction and operation of gigafactories. By 2030, PowerCo and partners are expected to generate annual revenue of over 20 billion euros.

Media Contacts:

Dr. Stefan Ernst
Spokesperson Battery | Volkswagen Group Technology
Tel. +49 (0) 5361 / 9-960976
Email: stefan.ernst1@volkswagen.de

Andreas Groß
Spokesperson Corporate | Volkswagen Group Technology and Volkswagen Group Components
Tel. +49 (0) 5361 / 9-89043
Email: andreas.gross1@volkswagen.de

SOURCE: Volkswagen AG