Gotion will invest 1.1 billion euros to acquire 49 percent of Volkswagen’s battery gigafactory in Sagunto. The move cements a powerful alliance and signals a new era for European battery production.
Volkswagen’s battery gigafactory in Sagunto, Valencia, is still under construction. Now, Gotion is putting 1.1 billion euros on the table for a 49 percent stake. The deal was confirmed on September 28, 2026. Both companies say this is part of Volkswagen’s push to build a local battery supply chain in Europe, as reported by Reuters. The agreement still needs regulatory and shareholder approval. If it goes through, Gotion and Volkswagen’s PowerCo will run the plant together. This site is set to become Europe’s main hub for lithium iron phosphate (LFP) battery production.
Europe has depended on Chinese-made LFP battery cells for years. That could change. Volkswagen and Gotion want to build a regional supply chain and cut that reliance. The Sagunto plant will anchor a network of joint ventures. These will stretch from Spain to Slovakia and Morocco. All will focus on LFP cell and cathode material manufacturing. Volkswagen Group’s official press release says the Valencia project is meant for a joint venture, with PowerCo and Gotion sharing management.
The initial phase of the Sagunto plant is planned for 29.1 GWh annual capacity, with later targets of up to 60 GWh after full ramp-up.
The partnership goes beyond Valencia. PowerCo will put 470 million euros into new plants in Surany, Slovakia, and Kenitra, Morocco. It will take a 49 percent stake in each. These sites, together with Sagunto, are designed to speed up the rollout of affordable, robust LFP batteries across Europe. The companies call this technology “competitive prices, long life and great robustness.” Anadolu Agency and other industry sources confirm the total investment for these joint ventures in Europe and North Africa is about 1.5 billion euros.
PowerCo will keep a 51 percent majority in the Sagunto joint venture. The original investment of over 2.3 billion euros stands. So does the promise of more than 1,500 direct jobs in the first phase. Both companies have publicly promised to keep jobs and investment levels in the region. Joint management will oversee the next steps. El Norte de Castilla reports these commitments have been reaffirmed after the new partnership structure.
Reuters reports that Volkswagen has also agreed to sell a 5.3% stake in Gotion as part of optimizing its shareholder structure and strengthening the long-term partnership between the two companies. This move is seen as a step to reinforce the alliance’s stability while maintaining significant cross-holdings.
Volkswagen is also making a financial move. The group has signed binding agreements to sell a 5.3 percent stake in Gotion. The goal is to optimize its shareholder structure and deepen long-term synergies. Volkswagen will still hold a significant stake in Gotion. This should help keep the alliance stable.
Industry analysts say the LFP battery market in Europe is set for rapid growth. Market share could jump from about 10 percent now to as much as 40–60 percent by 2030. But Volkswagen admits Europe still lacks real LFP production capacity. This deal aims to close that gap. According to just-auto and other sector analysts, the Sagunto project is expected to help Europe rely less on imported Chinese LFP cells.
Spain’s car industry has seen a surge of foreign investment and new competition. A recent report on the changing landscape among carmakers highlights this trend. The Gotion-Volkswagen alliance adds a new chapter. Valencia is now a key player in Europe’s electric future.
This deal is not just about money. It is a clear move to secure technology and supply chain strength in a market long dominated by Asia. By building LFP battery production in Spain and expanding into Slovakia and Morocco, Volkswagen and Gotion are not just reacting to demand. They are shaping the next phase of European electromobility. The size of the investment, the job guarantees, and the focus on affordable battery tech all point to a strategy that could change Europe’s place in the global auto supply chain.
