Volkswagen Group battery company PowerCo and the Generalitat Valenciana have signed a collaboration agreement for the development of the electric vehicle battery gigafactory project, to be located in Sagunto. The agreement was signed this morning in the Gothic courtyard of the Palau de la Generalitat Valenciana, in the presence of the President of the Generalitat, Ximo Puig; the COO of PowerCo, Sebastian Wolf; and the Executive Vice-President for Purchasing of SEAT S.A. and head of the Future: Fast Forward project, Alfonso Sancha. The event was also attended by other representatives of the Valencian Government, as well as political and business representatives of the Valencian Community.
This agreement represents a further step forward in the construction of the Sagunto gigafactory. The site is one of the main pillars of the Future: Fast Forward project (F3), led by the Volkswagen Group and SEAT S.A. to drive the transformation of the automotive industry in Spain towards electrification. The contract outlines the technical requirements of the plant, its administrative processes, environmental and urban development plans, and the legal requirements necessary for its start-up, as well as the additional support that the Valencian Government will offer in terms of training and financial support.
The President of the Generalitat Valenciana, Ximo Puig, announced the construction of a pioneering training center, designed to upskill employees that work in the automotive industry, to meet the demand that will be generated by PowerCo’s gigafactory. Puig explained that “the new training center will have an investment of 15 million euros, occupy a plot of 20,000 square meters next to the battery factory in Sagunto, and will be focused on the training of young people so that they can later work in it”.
Sebastian Wolf, Chief Operations Officer (COO) of PowerCo: “With Salzgitter as lead plant, Valencia will be the first full roll-out of our new standard factory concept. It allows maximized economies of scale as well as interchangeability in-between production lines globally. In addition, it enables reduced ramp-up times from 36 months down to 18 months. For PowerCo, the unified cell and the standard factory are the two key success factors for fast ramp-up and global competitiveness.”
Alfonso Sancha, Executive Vice-President for Purchasing of SEAT S.A. and head of the Future: Fast Forward project: “With the signing of the agreement between the Generalitat Valenciana and PowerCo, progress is being made in the development of the Sagunto gigafactory. The gigafactory is one of the main pillars of the Future: Fast Forward project, together with the production of electric vehicles at the Martorell and Pamplona plants, and the construction of a comprehensive supplier ecosystem, which will drive the transformation of the automotive industry in Spain towards electrification.”
F3, the largest investment in the history of Spanish industry
In the case of a positive resolution of the project submitted to the PERTE for the Electric and Connected Vehicle, the Volkswagen Group, PowerCo and SEAT S.A., together with its F3 partners, would mobilise 10 billion euros for the electrification of the country. This figure would represent the largest industrial investment in Spain’s history. The project, which is made up of 62 companies from 11 autonomous communities, with 61 % of them being SMEs, includes areas related to training, digitization, and the circular economy.
The Valencia plant will play a key role in the Volkswagen Group’s electrification plan, and will be the Group’s first in-house gigafactory outside Germany. The Volkswagen Group plans to invest more than 3 billion euros in the 200-hectare site, which will have an annual production capacity of 40 GWh and will supply the total volume of batteries needed by the Martorell and Pamplona plants. In addition, it is expected to generate more than 3,000 skilled jobs by 2030.
In line with the Volkswagen Group’s aim to be a CO2 neutral company by 2050 and to meet the requirements of the European Green Deal, the electricity to supply the gigafactory will come from 100 % renewable energy, with a focus on reusing raw materials. Thanks to an agreement with Iberdrola, a photovoltaic plant will be built to supply the gigafactory with green energy.
PowerCo bundles global battery activities
The responsibility for the Volkswagen Group’s global battery business has been transferred to the new company, PowerCo. In addition to cell production, PowerCo will be responsible for activities along the entire battery value chain. By 2030, it will invest more than 20 billion euros together with partners in the development of the business area, to generate annual sales in excess of 20 billion euros and to employ up to 20,000 people in Europe alone.
From Salzgitter (Germany), the company will manage international factory operations, the continuous development of cell technology, the vertical integration of the value chain and the supply of machinery and equipment to the factories.
Looking ahead, further products, such as a major storage systems for the energy grid, are planned. Sagunto is the second cell factory to be announced, with construction having started at the Salzgitter plant a few weeks ago. Sites are also currently being identified for three further cell factories in Europe. In addition to Europe, PowerCo is also already exploring the possibility of further gigafactories in North America.
PowerCo is managed by CEO Frank Blome and the members of the Executive Committee are Sebastian Wolf, Chief Operations Officer; Kai Alexander Müller, Chief Financial Officer; Soonho Ahn,Chief Technology Officer; Jörg Teichmann,Chief Purchasing Officer; and Sebastian Krapoth,Chief Human Resources Officer.