Volkswagen Group and Seat S.A. are prepared to invest €10 bn euros (£8.5bn) into a battery Gigafactory in Spain, the largest single industrial investment in the country’s history.
Set to be built in Sagunto, outside of Valencia, the Gigafactory is expected to produce 40GWh per year, supplying Volkswagen Group’s Martorell and Pamplona production factories.
The Gigafactory will occupy an area of 200 hectares and employ up to 3,000 people by 2030, with the site entering its construction phase in the first quarter of 2023. Battery production is planned to start in 2026.
Following an agreement with electric utility company Iberdrola, Volkswagen will build a solar energy plant that will supply the Sagunto Gigafactory with green energy.
The solar plant will cover 250 hectares and will be located less than 10 kilometers from the Gigafactory. Initially, the solar plant will provide 20% of the Gigafactory’s total energy according to Volkswagen.
Additional funding for the project will also be provided by the Strategic Project for Economic Recovery and Transformation program (PERTE, in Spanish) for the Electric and Connected Vehicle (VEC, in Spanish). The first milestone for the construction of the Gigafactory rests on a positive outcome of the PERTE submission and the finalization of building permits.
“We will build the battery Gigafactory with an investment of more than 3 billion euros, but the PERTE funds are essential if we are to realize our ambition of turning Spain into a European hub for electric vehicles,” said Thomas Schmall, Chief Technology Officer of Volkswagen AG and Chairman of the Board of SEAT S.A.