Volkswagen, PowerCo and Gotion have announced three joint ventures with a combined estimated investment of €3.22 billion
The Valencia and Slovakia facilities will have a combined planned annual battery cell production capacity of 37.5 GWh
The Morocco facility will produce up to 100,000 tons of LFP cathode materials annually
German automaker Volkswagen Group, its battery subsidiary PowerCo, and Chinese battery manufacturer Gotion High-Tech are joining forces in a €3.22 billion push to develop Europe’s lithium iron phosphate (LFP) battery supply chain.
The three joint venture (JV) partnerships announced will cover LFP battery cell production with a combined planned annual capacity of 37.5 GWh, alongside a cathode material plant designed to produce 100,000 tons a year.
While the investments mainly target the EV market, the Slovakian plant will also produce cells for energy storage systems (ESS).
The partnership comes as the European Union seeks to reduce its reliance on China for critical raw materials used in batteries. In her September 2026 State of the Union address, European Commission President Ursula von der Leyen said the bloc depends on China for over 80% of many critical raw materials and 90% of some rare earths.
Nevertheless, earlier this year, Norway-based LFP battery cell manufacturer Morrow Batteries filed for insolvency, after over a year of Sweden’s Northvolt announcing bankruptcy, both citing financial challenges operating in a capital intensive industry (see Europe’s Morrow Batteries Files For Bankruptcy).
Under the agreements announced, PowerCo plans to transfer its under-construction battery factory in Valencia, Spain, to a JV in which it will hold a 51% stake, with Gotion owning the remaining 49%.
According to Gotion, the facility is planned to have an annual production capacity of 29.1 GWh and will manufacture LFP-based Unified Cells. The partners aim to develop it into a European LFP battery production hub. The project’s total investment is estimated at €2.62 billion, with Gotion planning to invest approximately €1.1 billion to acquire its stake.
In Slovakia, Gotion will establish an 8.4 GWh annual capacity LFP cell factory in Šurany through a JV with PowerCo. Gotion will hold a 51% majority stake, while PowerCo will own the remaining 49%. The partners will jointly manage the facility, which will produce LFP cells for electric vehicle (EV) and energy storage system (ESS) applications. The project involves an estimated investment of €480 million.
In a JV with Slovakia’s InoBat, Gotion investing in Šurany through GIB EnergyX Slovakia which aims for 20 GWh capacity, scalable up to 40 GWh. InoBat is now eyeing Nasdaq listing (see Global Battery Storage News Snippets).
PowerCo and Gotion also plan to establish a new production facility in Kenitra, Morocco with an annual production capacity of 100,000 tons of cathode active materials for LFP batteries. The €480 million investment will see Gotion with 51% majority stake, while both partners will jointly manage the venture.
Volkswagen said the Moroccan facility is intended to diversify the supply of key cathode active materials, enhance supply security and strengthen the regional battery value chain.
The battery cells produced by the Slovakian and Valencia JVs will primarily supply Volkswagen vehicles in Europe. Meanwhile, the cathode materials manufactured by the Moroccan JV will be preferentially supplied to these two facilities to support regional demand.
Gotion's announcement puts the combined investment in the three projects at approximately €3.222 billion, comprising €2.262 billion for Valencia and €480 million each for the Slovakian and Moroccan projects.
Gotion estimates its total investment across the three projects at approximately €1.598 billion, while PowerCo's contribution is estimated at €1.624 billion.
Separately, Volkswagen Group has entered into definitive agreements to sell a 5.3% equity stake in Gotion through its subsidiary Volkswagen (China) Investment Co. Ltd.
The transaction is intended to optimize shareholding structures and support long-term strategic cooperation, Volkswagen said.
LFP batteries account for around 10% of Europe's battery market currently, and their share could increase to between 40% and 60% by 2030, according to forecasts cited by Volkswagen. With no relevant LFP battery production capacity in Europe currently, this partnership with Gotion strengthens the continent’s position in the global LFP battery market, said the German group.
“Through cross-shareholdings and three joint sites, we are anchoring our shared strategy to localise battery production in Europe, racing to seize the opportunities of global electric mobility, and jointly forging a new paradigm of world-class, win-win cooperation in the lithium battery industry,” said Chairman of Gotion Hith-tech, Li Zhen.
Gotion’s investment in European battery industry comes amidst news reports that China has temporarily paused approvals for some new energy storage manufacturing projects as the government intends to avoid an overcapacity situation (see China Halts Approvals For New Battery Storage Factories).
Another Chinese battery manufacturer CALB Group is building a 15 GWh lithium-ion gigafactory in Portugal for which it roped in Mota-Engil as its local contractors for phase I in June 2026. The factory will primarily cater to the European market (see China’s CALB Hires Mota-Engil For €2Bn Portuguese Gigafactory).
