Volkswagen Deepens Ties with Gotion, Investing €1.57B in Battery Ventures

Volkswagen is doubling down on its electric vehicle battery strategy through a deepened partnership with Chinese battery manufacturer Gotion, committing a combined €1.57 billion to joint ventures in Spain, Slovakia, and Morocco. This move underscores Volkswagen’s increasing dependence on Chinese firms to secure critical battery supply as it accelerates its EV transition.

The collaboration will see existing and new facilities converted into jointly-owned entities. Specifically, Volkswagen’s PowerCo battery cell factory currently under construction in Valencia, Spain, will be incorporated into a joint venture. A Gotion factory in Surany, Slovakia, will also become a joint venture, alongside a new facility planned in Morocco for the production of cathode material—a key battery component. Volkswagen’s PowerCo subsidiary will invest approximately €470 million by 2030 to acquire 49% stakes in the Slovakian and Moroccan ventures, while Gotion will contribute around €1.1 billion for a 49% share of the Valencia plant. The plans, however, remain subject to regulatory approvals.

According to Volkswagen’s Technology Chief and PowerCo Supervisory Board Chairman Thomas Schmall, this partnership presents a “win-win” scenario. Volkswagen gains access to specific battery technologies more rapidly, while Gotion secures access to the European market. Schmall emphasized the company's aim to achieve "technological strengthening with simultaneous financial relief," positioning Volkswagen as the first European automaker to cover the entire battery value chain, from development to production. The Moroccan plant is strategically important, as it will be one of the few facilities outside of China dedicated to cathode material production, enhancing supply chain security.

The partnership builds on Volkswagen’s existing relationship with Gotion, in which it became a major shareholder in 2020. Gotion also supported Volkswagen in establishing its PowerCo manufacturing operations in Salzgitter, Germany. While the Salzgitter and St. Thomas, Canada, facilities are excluded from this new agreement, the broader strategic shift is clear: Volkswagen is increasingly reliant on Chinese expertise and investment to fulfill its ambitious EV goals.

Volkswagen’s commitment to battery production is substantial, but the financial contribution from Gotion—exceeding Volkswagen’s investment—highlights the capital intensity of the battery industry and the willingness of Chinese firms to play a leading role. The success of these joint ventures will depend on navigating regulatory hurdles and executing the planned investments efficiently, but the partnership positions Volkswagen to better compete in the rapidly evolving EV market.