Volkswagen's PowerCo Breaks Ground on Second Gigafactory in Spain

PowerCo, a subsidiary of Volkswagen Group dedicated to battery technology, has started construction on its second gigafactory in the Spanish region of Valencia. The company broke ground on the facility with the presence of King Felipe VI of Spain, Pedro Sánchez, the country’s president, and Ximo Puig, president of the Valencian Generalitat. The gigafactory Valencia is expected to produce unified cells and start production in 2026. The factory will be built over an area of around 130 hectares in Sagunto, with a potential to expand to 60 GWh in the future.

PowerCo has made battery technology a core element of Volkswagen’s “NEW AUTO” strategy, with the goal of becoming a global player in the battery business. Since its launch in July 2022, the company has decided on three sites for cell factories, with two of them already under construction. The Valencia gigafactory will directly employ over 3,000 people, and there is the potential for up to 30,000 indirect jobs to be created at suppliers and partners in Spain.

The annual production capacity of the gigafactory Valencia is initially 40 GWh, but it can be expanded to 60 GWh in the future. The cell factory will be supplied completely with green electricity generated by solar and wind power. The raw material cycle will be closed directly on the site of the cell factory, with a new 250-hectare solar farm in the immediate vicinity. The Valencia gigafactory will supply unified cells to the vehicle plants in Martorell and Pamplona, among others.

The gigafactory Valencia is a core component of the 10 billion euro investment program called “Future: Fast Forward,” which Volkswagen announced last year with PowerCo, its Spanish subsidiary SEAT S.A., and 49 partners. The investment program aims to electrify the car factories in Martorell and Pamplona as part of the PERTE program for electric and connected vehicles.

PowerCo CEO Frank Blome said that the company stands for responsible conduct, including good working conditions, care for the environment, and sparing use of scarce resources. Blome added that the company aims to be a good neighbor to the people in the region and make a significant contribution to economic development. PowerCo plans to work with the regional government to initiate targeted projects aimed at strengthening science and society.

The Spanish President Pedro Sánchez said that the factory exemplifies the Spanish government’s commitment to innovation and sustainable mobility. The factory is a sign of Spain’s commitment to industry, as well as to the characteristics that define an entrepreneurial nation in the global market, such as innovation, territorial cohesion, and public-private cooperation. The President of the Generalitat Valenciana, Ximo Puig, thanked the Volkswagen Group and SEAT for their commitment to Sagunto and the Valencian community. Puig added that the factory is a productive alliance between PowerCo, the Generalitat, and the governments of Spain and Europe on the path towards a sustainable transition in mobility.

PowerCo’s gigafactory Valencia is an important milestone for the company and Volkswagen Group’s battery business. The company’s commitment to sustainability, renewable energy, and economic development is evident in the construction of the factory. The factory’s potential to create over 30,000 indirect jobs will also have a positive impact on the Valencian community.