Chinese battery manufacturer Gotion High-tech and Volkswagen Group announced plans to jointly invest approximately €3.22 billion ($3.67 billion) in three battery and materials production projects across Europe and North Africa, marking a significant expansion of their strategic partnership beyond China’s market.
The companies plan to establish joint ventures in Valencia, Spain; Šurany, Slovakia; and Kenitra, Morocco, with a combined annual battery production capacity of 37.5 gigawatt-hours and cathode material capacity of 100,000 metric tons, according to an announcement on September 28.
Gotion will contribute approximately €1.6 billion, while Volkswagen’s battery subsidiary PowerCo will provide approximately €1.62 billion, with funding deployed in stages. The projects are expected to take no more than five years to construct, excluding land and buildings.
The largest undertaking is the Valencia project in Spain, involving an investment of approximately €2.26 billion to build a battery plant with 29.1 GWh annual capacity. PowerCo will control this facility with a 51% stake, while Gotion holds 49%, integrating the Chinese battery maker deeper into Volkswagen Group’s core European supply system.
In Slovakia, a separate 8.4 GWh battery project in Šurany will see Gotion take majority control with a 51% stake and PowerCo holding 49%. This arrangement gives Gotion independent operational control of a European manufacturing foothold.
The Morocco venture will focus on upstream production, establishing a lithium iron phosphate cathode materials facility with 100,000 tonnes of annual capacity. Gotion will hold 51% and control this project as well. Morocco’s abundant phosphate reserves—accounting for roughly 70% of global supplies—make it an attractive location for cathode material production to supply the European battery plants.
Batteries produced at the two European facilities will prioritize meeting Volkswagen Group’s demand in Europe, though specific purchase volumes and supply agreements will be finalized in subsequent contracts. A Gotion subsidiary has separately signed engineering, procurement, and construction contracts with PowerCo Spain worth approximately €1.094 billion ($1.2 billion), positioning Gotion not merely as a shareholder but also as the construction contractor for the Valencia project.
The partnership builds on existing ties. Volkswagen (China) Investment Co. holds a 24.28% stake in Gotion, making it the battery maker’s largest shareholder. The investment plans constitute related-party transactions and require shareholder approval plus government clearances in China and overseas before proceeding.
The deal reflects Europe’s broader push to localize battery production and reduce dependence on Asian supply chains. Volkswagen Group, Europe’s largest automaker, faces enormous battery capacity demands as it accelerates electrification, and PowerCo is tasked with building plants across the continent.
For Gotion, the partnership offers multiple strategic advantages: securing long-term supply contracts with a major automaker, establishing manufacturing operations under its own control in key markets, and expanding beyond pure battery supply into plant construction services.
Gotion’s market position strengthened in the first half of 2026, with global EV battery installations reaching 34.0 GWh, up 44.2% year-over-year, according to South Korean research firm SNE Research. The company ranked fifth globally with a 4.7% market share, up from 3.9% a year earlier, though still trailing Chinese leaders CATL and BYD.
Financially, Gotion reported sharp first-half improvement, with revenue rising to 27.776 billion yuan ($4.1 billion) from 19.394 billion yuan ($2.9 billion) a year prior, and net profit climbing to 1.386 billion yuan ($206.8 million) from 367 million yuan ($54.8 million). However, Gotion’s stock has declined more than 30% year-to-date, closing at 26.07 yuan on September 28 after the announcement, down 2.58% for the day.
