Volkswagen Group, its battery subsidiary PowerCo and Chinese battery maker Gotion High-Tech are deepening their strategic alliance with plans to build three joint ventures in Europe and North Africa, according to Chinese outlet D1EV. The partnership targets industrial-scale production of lithium iron phosphate (LFP) cells and cathode active materials, with the Valencia site in Spain earmarked as a European hub for LFP battery manufacturing.
Three Sites, One Chemistry
The three planned ventures will be located in Valencia, Spain; Šurany, Slovakia; and Kenitra, Morocco. LFP chemistry, which is cheaper and more durable than nickel-based alternatives, is increasingly favored for entry-level and mid-range electric vehicles. The Valencia project will serve as the anchor for the European LFP production network, the companies said.
The announcement underscores how European automakers are leaning on Chinese battery expertise to cut costs and accelerate their EV transitions. Gotion High-Tech, which is part-owned by Volkswagen, has been a key supplier of LFP cells for the German group's MEB platform models.
Broader Industry Moves
The news came as part of a wider roundup of international auto developments. Toyota's global sales fell 6.4% year-on-year in August to 790,743 units, with its China sales dropping 22.8% - the seventh consecutive month of decline there. Separately, Stellantis said it would suspend some production at its French plants in late October due to a shortage of batteries for long-range electric vehicles, affecting the Sochaux and Rennes factories.
In the United States, General Motors and LG Energy Solution plan to upgrade their Ultium Cells joint-venture plant in Tennessee to produce lower-cost high-manganese lithium (LMR) prismatic cells, with the work expected to be completed by 2028. Meanwhile, Hyundai said it would invest about $500 million in its Alabama plant to build new engines and hybrid components.
The expansion of the VW-Gotion partnership comes as Thailand's auto market shifts decisively toward electrified vehicles. In August, pure electric and hybrid models drove growth, with gasoline vehicles falling below 20% of new-car sales for the first time.
