Volkswagen is targeting production of one million vehicles in Spain and Portugal by 2027, with a new generation of compact electric cars driving the plan. ID.Cross production at the Navarra plant marks a major shift in the German group’s Iberian strategy. The target depends on the combined capacity of Volkswagen’s three basic regional plants, Martorell, Navarra and Palmela, which are expected to reach full output in the coming years.
The target rests on a €10 billion investment, including the Sagunto battery gigafactory in Valencia. The plan brings together four basic electric models: Cupra Raval and VW I.D Polo, assembled in Martorell near Barcelona, plus Skoda Epiq and the new VW I.D. Cross in Pamplona. Next year, the even smaller ID.1, under four meters in length, will join the lineup from Palmela, Portugal, further expanding Volkswagen’s presence in the region. Local industry sources say all these models will use batteries from PowerCo’s Sagunto gigafactory, tying the regional supply chain closely together.
Serial production of the VW ID.Cross at the Navarra plant in Landaben officially began on September 18, 2026, adding a new electric crossover to the factory’s lines. André Kleb, responsible for Volkswagen’s production across the Iberian Peninsula, has said the new models could push the group to its all-time production record in the region as early as next year. For the Landaben factory, which has operated since 1966, the change is impressive. Once the home of the VW Polo, with over eight million units produced until two years ago, the plant now builds combustion models such as the VW T-Cross and Taigo alongside electric vehicles, including the Skoda Epiq and ID.Cross. Regional economic outlets report that Landaben’s current production officially includes these four models, with electric and combustion vehicles sharing the same lines.
Half of Landaben’s output is set to be electric, a shift expected to increase industrial flexibility and expand the workforce. The plant has added more than 1,000 staff in recent months, reaching nearly 5,500 employees to support the electric transition. From September to the end of 2026, Volkswagen Navarra plans to produce 24,300 ID.Cross units, information from local press reports citing plant management. This rapid ramp-up forms part of a broader strategy to make nearly half of Landaben’s total output electric and place it among the most flexible sites in the Volkswagen Group. With two new EVs arriving, Volkswagen expects Landaben to produce a record 360,000 units in 2027. Local press, citing Volkswagen Navarra’s management, reports that the factory aims to beat its previous record of 353,353 vehicles, set in 2011.
At the official launch of the ID.Cross, María Chivite, president of the Government of Navarra, described the project as a model of public-private collaboration. She said government support has focused on new idea and job creation, and pointed to the project’s wider economic impact. Volkswagen CEO Thomas Schäfer praised the Navarra plant’s ability to reinvent itself, highlighting its new focus on "attractive and affordable cars."
The push for electrification extends beyond Volkswagen. As reported earlier, other manufacturers are also expanding their electric and hybrid offerings to meet changing demand and regulatory requirements across Europe.
Volkswagen’s approach in Spain and Portugal reaches beyond production figures. By focusing on small, accessible electric vehicles and investing heavily in local manufacturing, the group aims to shape the next phase of the Iberian auto industry. Hiring and the changing model mix, along with battery production, point to a change of the region’s industrial field. If Volkswagen meets its production targets, it will strengthen its position in Spain and Portugal and set a benchmark for established automakers adapting to the electric era while keeping their manufacturing base. Several Spanish and European automotive news outlets are following the strategy as a potential model for large-scale electrification in traditional carmaking regions.
