Volkswagen Group and its Chinese associate Gotion High-tech are accelerating efforts to meet global demand for electric vehicle (EV) batteries, announcing a joint investment of €3.22 billion (US$3.66 billion) to establish three manufacturing lines in Europe and North Africa.
The plants, to be co-owned by the German brand and China’s fourth-largest electric vehicle battery manufacturer, will have the capacity to produce 37.5 gigawatt hours (GWh) of lithium-ion battery output and 100,000 metric tons of cathode materials annually, Gotion stated in a filing to the exchange on Monday.
The company stated that the signings were “aligned with Gotion’s strategy for overseas expansion to strengthen our presence in the global EV battery market while also enhancing our long-term strategic partnership with Volkswagen.”
According to industry experts, one GWh of electric vehicle battery capacity can power approximately 20,000 fully electric cars with a range of 500 km (311 miles).
Gotion announced it plans to invest approximately €1.6 billion to construct three production plants in Spain, Slovakia, and Morocco, with VW contributing a comparable sum.
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The largest initiative, an electric vehicle factory in Valencia, Spain, run by VW subsidiary PowerCo, needs a total investment of €2.26 billion to enhance it for a yearly battery output of 29.1 GWh.
"EV batteries developed in China are seeing significant demand beyond mainland China," stated Chen Jinzhu, CEO of the Shanghai Mingliang Auto Service consultancy.
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“Working together with VW to establish factories in Europe will provide Gotion with convenient access to the market as it accelerates its global expansion," adds Chen.
Gotion, located in Hefei, the capital city of eastern China’s Anhui province, is 24.3 percent owned by Volkswagen.
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According to the exchange filing, battery cells from European factories would primarily be provided to VW, and Gotion would participate in establishing significant battery cell production areas on the continent.