Volkswagen wants Gotion inside its Spanish battery plant

Volkswagen wants its Chinese battery partner inside the Spanish plant it has been building at Sagunto. Gotion’s board agreed on Monday to take 49%. PowerCo, Volkswagen’s own battery company, would keep control.

Nothing is signed. Gotion’s shareholders still have to vote, and governments in more than one country still have to say yes. Volkswagen said on Monday that the two companies had agreed to go further, after working together since 2020. Gotion’s own papers, published the next day, are plainer. Until the vote and the approvals are in, the deal can still fall over. Sagunto remains entirely Volkswagen’s, and it has not sold a cell.

49%

What Gotion would own at Sagunto. PowerCo keeps the rest

29.1 GWh

The cell plant now described in the papers

€1.1bn

What Gotion would be paid to build the dry rooms and phase two

No sales

What the Sagunto company reported in 2025 and the first half of 2026

Spain, then Slovakia, then Morocco

The proposal in front of Gotion’s shareholders is three projects, together worth about €3.2 billion. Gotion would put in about €1.6 billion. PowerCo would put in about €1.6 billion. Gotion says it would use its own money and money it still has to raise. These are estimates. The final bill is whatever actually gets spent.

Sagunto is the one that matters. About €2.3 billion for a 29.1 gigawatt-hour plant, and that figure leaves out the land and the buildings. Gotion would buy its share by putting money into the Spanish company PowerCo already owns. PowerCo would keep 51%, and it would keep the right to name the chief executive. That person would also be the finance director.

There are two smaller projects beside it. At Šurany in Slovakia, a new cell plant of 8.4 gigawatt-hours, about €480 million, again before land and buildings. Gotion would own 51%. The company has not been set up yet. At Kenitra in Morocco, a plant for 100,000 tonnes a year of lithium iron phosphate cathode, also about €480 million. Gotion would own 51% of that too, through a Moroccan holding company it set up in Rabat on 3 August. The share capital of that company is 10,000 dirhams. It is a name on a register, not a works.

Volkswagen says the Spanish plant is meant to become a European home for lithium iron phosphate cells, the cheaper sort now going into a lot of new cars. Gotion’s papers call the Spanish and Slovak output lithium batteries, and only get specific in Morocco, where the product is the cathode powder those cells need. Cells from the two European plants would be offered to Volkswagen in Europe first. The powder from Morocco would be offered to those plants first. How many, and what happens if a plant cannot deliver, is not agreed. That is for a contract they have not written yet.

Each site is allowed up to five years to build. There is no date for the first cell.

A plant with assets and no customers

The Spanish company Gotion would be buying into was set up in September 2021. At the end of June it had €1.22 billion of assets. It reported no sales in 2025, and none in the first half of this year. It lost €20 million in those six months.

PowerCo, the parent in Germany, is trading, and it is still losing money. In the first half it took in just under €100 million and lost €245 million. Sagunto is the site with the concrete and none of the invoices.

When PowerCo started building in March 2023, it said the factory would be making its standard cell in 2026, at 40 gigawatt-hours, with room to go to 60, and with more than 3,000 people on the payroll. The papers this week say 29.1 gigawatt-hours. They do not say when production starts. Anyone who had Sagunto down as a 2026 source of cells has a smaller plant, and no date.

Spain has already written a cheque. The company holds a cash grant of €152 million. A bank has guaranteed that the money comes back if it is not used as promised, and Volkswagen stands behind the bank. If that guarantee is called, Gotion’s European company would pay 49% of whatever Volkswagen has to pay. The stake and the share of the risk are the same.

Gotion would also build it

The same board meeting agreed a second deal, and this one is about the building rather than the shares. Gotion would be the contractor. PowerCo’s Spanish company would be the customer. The price is fixed at €1.094 billion.

First come the dry rooms for the opening phase. Gotion would design them, build them, buy the kit, fit it and switch it on, and it would carry the cost if the job overruns or runs late. The allowance is 472 days from the day work starts. The price is €295 million. That includes Spanish import tax, and €20 million of import VAT which goes back to PowerCo if the relief comes through. Nobody has said when the 472 days begin.

Then the second phase of the line, on the same terms, over 1,181 days, for €799 million. This contract is also waiting on the shareholder vote. It has to, because Volkswagen’s Chinese investment arm owned 24.28% of Gotion on 20 September and is the largest shareholder. By the end of August the two groups had already done RMB 5.77 billion of business with each other. The building contract would be more of it. Gotion gets paid to construct a plant that PowerCo would still control.

For anyone buying cells, or building a car around a pack, the useful part is simple. Volkswagen is trying to put its Chinese partner into the Spanish plant, on a chemistry it can price, and to have that partner build the rooms the cells have to be made in. The partner’s shareholders have not voted. The plant has not sold anything. Slovakia and Morocco are still proposals. A regulator can refuse it, either side can walk away if the other defaults, and there is a final deadline in the papers that has not been published.