Being built over an area of around 130ha in Sagunto, the Spanish cell factory is expected to begin production of the unified cell in 2026 to contribute to the German automobile major's €10bn Future: Fast Forward investment initiative


Volkswagen begins construction of Gigafactory Valencia in Spain. (Credit: Volkswagen)

Volkswagen Group has broken ground on Gigafactory Valencia, the second gigafactory of PowerCo, located in Valencia, Spain, and entailing an investment of more than €3bn.

Gigafactory Valencia is a key component of the German automobile major’s €10bn Future: Fast Forward investment initiative, unveiled last year in collaboration with its battery company PowerCo and 49 partners.

The new cell factory is anticipated to have an initial annual production capacity of 40GWh with the potential to be expanded to 60GWh in the future.

Being built over an area of approximately 130ha in Sagunto, the Spanish cell factory is expected to begin production of the unified cell in 2026.

Gigafactory Valencia will also directly employ over 3,000 people in the future and further up to 30,000 indirect jobs that could be created at suppliers and partners in Spain, said the company citing a recent study.

Spanish President Pedro Sánchez said: “The factory that will be built here exemplifies the Spanish Government’s commitment to innovation and sustainable mobility.

“It is a sign of our commitment to industry, but also to the characteristics that define an entrepreneurial nation in the global market: innovation, territorial cohesion and public-private cooperation.”

PowerCo’s first €2bn cell factory broke ground in Salzgitter, Germany in July 2022. The German factory is planned to begin production in 2025.

Recently, the German company selected St. Thomas in Ontario, Canada to develop the company’s first gigafactory for electric vehicle (EV) battery production outside Europe.

PowerCo supervisory board chairman Thomas Schmall said: “We are moving into the fast lane with PowerCo. We have just broken ground for PowerCo’s second gigafactory in Valencia, and are already making the next step with the announcement of another gigafactory in St. Thomas, Canada.

“Our objective is to make PowerCo a global player in the battery business and pave the way for better mobility with sustainably manufactured battery cells. The gigafactory Valencia is an important milestone in that.”