The deal has been done. The Volkswagen Group and its battery subsidiary PowerCo SE¹⁾ are setting up the country’s first gigafactory in Parc Sagunt II in the Spanish city of Valencia. The construction of the battery production complex is a central pillar of the “Future: Fast Forward” programme, and is intended to provide an important boost for Spain in its transformation into a European hub for electric mobility. The approximately 200-hectare new site in the port city will initially have an annual production capacity of 40 gigawatt hours (GWh), but has the potential to be expanded to 60 GWh in the future. The cell factory is to be supplied completely with green electricity generated by solar and wind power, for instance by a new 250-hectare solar farm in the immediate vicinity. Gigafactory Valencia will start production of the unified cell in 2026.

The Volkswagen Group’s current battery offensive was launched some months back – in the summer of last year, to be exact. In July 2022, the Group broke ground on its first in-house cell factory in Salzgitter, Lower Saxony, Germany. The first batteries are expected to roll off the production line in just two years’ time. In terms of technology, the batteries will be prismatic unified cells, which allow the flexible use of a raft of different cell chemistries. Specifically, this means that these energy storage units could be used in up to 80 percent of all Group models. They are expected to become benchmarks with respect to range, charging times and safety. A further benefit is that the use of such a unified cell delivers clear cost advantages. All in all, they meet essential prerequisites for a possible future industrial standard.

The decision by PowerCo to establish its next factory in the Canadian city of St. Thomas, Ontario, represents another important milestone in the worldwide roll-out of Volkswagen’s battery strategy. Following Salzgitter and Valencia, this is the Group’s third gigafactory worldwide and the first PowerCo cell factory in North America. It will equip the Group brands’ BEVs in the region with cutting-edge battery cells. “PowerCo is all set to introduce key strategic assets such as the unified cell and the standardised cell factory to Canada and North America. We are dedicated to building up regional and therefore robust, transparent and sustainable supply chains,” says Frank Blome, CEO PowerCo SE. The cell factory in St. Thomas will have an annual production capacity of up to 90 GWh in the final expansion phase – enough for around 1 million electric vehicles. Up to 3,000 jobs will be created at the factory along with tens of thousands more indirect jobs in the region.