Battery plant in Valencia

Several media reported that Volkswagen has decided on the location for its battery cell factory in Spain. It will be built in Sagunto in the province of Valencia and have a capacity of 40 GWh per year. In fact, the Volkswagen Group announced its intention to build a battery factory in Spain at the strategy presentation. It was ‘New Auto’ and we will look it later.

According to the reports, the decision for Sagunt would be “95% made”. The project may invest in around 3.5 billion EUR and could create around 3,500 jobs there.

New Auto

Volkswagen Group consider proprietary battery tech, charging infrastructure and energy services key success factors in the mobility industry. Therefore, power will be a Volkswagen Group core competency by 2030. The two pillars “battery cell and system” and “charging and energy” try to realize it.

Volkswagen Group plans to establish a controlled battery supply chain by setting up new partnerships and tackling all aspects from raw material to recycling. The goal is to create a closed loop in the battery value chain. Also, the Group tries to establish the most sustainable and cost-effective way to build batteries.

In order to reach its goal, Volkswagen Group is advancing battery competence and reducing complexity. To that extent, it is introducing one unified battery cell format with up to 50% cost reduction and up to 80% use cases by 2030. Six giga factories in Europe with a total production capacity of 240 GWh by 2030 will help to secure battery supply.

Northvolt AB will operate its first location in Skellefteå, Sweden. Volkswagen Group invested an additional €500 million in its partner and works with Northvolt towards starting production in 2023.

When it comes to the second location in Salzgitter, Volkswagen Group is collaborating with Chinese cell specialist Gotion High-Tech. It can be a technological partner for a start of production in 2025. As a result, both partners will develop and industrialize the volume segment of the unified cell in the German plant.

As for a third location, Volkswagen Group intends to make Spain a strategic pillar of its electric campaign. What’s more, the Group is considering to establish the entire value chain of electric cars in that country. Thus, the third location is going to be Sagunt in the province of Valencia.

Execution is everything

When you hear from this report in relation to the location of Volkswagen’s third battery plant, what do you feel? In our opinion, “Execution is everything”. Our media continues reporting that electrification in the automotive industry is accelerating. Therefore, if you are management of traditional automotive companies such as Volkswagen and Toyota, the most important issue is how to react it. Or we can say that how to transform the big company or how to lead the fast-changing industry.

In this sense, we think that Volkswagen has the sense of emergency and has made bold decisions. In addition, it is taking actions. For example, in 2020, the German automotive giant decided to invest €73 billion to adapt rapid changing environment. Also, it made a decision to increase its investment in 2021.

When it comes to six giga factories in Europe, Volkswagen Group is working to realize them. Therefore, it can be useful for us to see Volkswagen’s decisions to follow the latest trends of the automotive industry.