Volkswagen and Gotion Move Closer to $3.67B Battery Buildout in Europe and North Africa

Volkswagen’s battery arm PowerCo and China’s Gotion have sketched out a roughly €3.22bn ($3.68bn) three-way investment spanning Spain, Slovakia and Morocco, according to a plan Gotion’s board signed off on the same day it was unveiled. Nothing is binding yet: a formal investment agreement has still to be inked, and the package needs shareholder sign-off plus regulatory clearances in both China and Europe.

Spain carries the heaviest price tag. In Valencia, the partners envision about €2.26bn to establish 29.1 GWh of yearly lithium-ion cell capacity. Gotion would take a 49% slice of the existing PowerCo Spain business via a capital increase, leaving PowerCo with 51% — a structure that echoes earlier local reporting that the two firms were deep in talks over a Gotion stake in that very plant.

Two smaller ventures flip that balance. In Šurany, Slovakia, around €480m would fund 8.4 GWh of annual capacity, with Gotion holding 51% and PowerCo 49%. A third tie-up, split the same way in Gotion’s favor, would put €480m into a lithium iron phosphate cathode materials plant in Kenitra, Morocco, targeting 100,000 metric tons a year to feed the European cell projects. Output from Spain and Slovakia is meant to serve Volkswagen’s own European demand first, though purchase volumes will be settled in separate agreements.

The two companies are already tightly linked: Volkswagen’s Chinese investment arm held 24.28% of Gotion as of 20 September, making it the battery maker’s largest shareholder. Gotion installed 34.0 GWh of EV batteries in the first seven months of 2026, up 44.2% year-on-year, lifting its global share from 3.9% to 4.7% and ranking it fifth worldwide. The deal slots into Volkswagen’s broader PowerCo strategy, built around a standardised prismatic ‘Unified Cell’ and a ‘Standard Factory’ template, with a stated ambition of pushing pack costs below $100/kWh.