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Volkswagen Wants To Spend $7.7 Billion Turning Spain Into An EV Hub, Build Gigafactory

Volkswagen announced today that it will apply to Spain’s Electric Vehicle PERTE program, which aims to transform the country’s economy by investing in electric and connected vehicle production projects.

The Volkswagen Group, which owns Spanish brands Seat and Cupra, said its plan is to electrify the country by creating a European electric vehicle hub, building up battery cell production, and creating a sustainable “E-ecosystem.” It’s calling the plan the “Future Fast Forward” program and, between VW and external suppliers, will include a total investment of more than €7 billion ($7.7 billion at current exchange rates).

“This project is highly important – for Volkswagen, for Spain, and for the whole of Europe. It’s our ambition to electrify Spain and we are willing to invest more than seven billion euro together with external suppliers for the electrification of our Martorell and Pamplona plants and the localization of the battery value chain in Valencia,” said Thomas Schmall, head of technology at VW.

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If the Spanish government approves the plan, VW said it will build a battery plant in Valencia with an output of 40 GWh per year. The plant would produce the automaker’s upcoming unified cell, be supplied by renewable energy, and enable renewable battery production.

It would be operated by 3,000 people and Volkswagen wants to open the plant by 2026. To do that, though, it says it has to begin construction by the end of the year and that will depend on the Spanish government approving its PERTE submission and finalizing permits on a tight timeline.

“To be competitive in the new electric world, we now have to raise productivity in our Spanish car production,” said Schmall. “We need to qualify many of our people for new tasks, including battery development and production. This calls for a lot of flexibility by everyone and a possible change of jobs.”

He added that if it gets the government’s support, the plan will have a positive effect on employment in the country. Spain is Europe’s second-largest vehicle manufacturer, and funds for PERTE were recently approved by the European Union.

PERTE “is a historic opportunity to turn the manufacture of electric and connected vehicles into a driving project that strengthens the automotive industry throughout the country,” said Spain’s minister for Industry, Trade, and Tourism, Reyes Maroto, in December. “We have the industrial capacities and the leadership of companies to invest in the mobility of the future, a mobility that will be more sustainable, digital, connected, and safe.”

In all, Volkswagen plans to build six Gigafactories in Europe with a combined annual capacity of 240 GWh.

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