VW and Gotion Split Three Plants to Fill Europe's LFP Gap

Europe currently has no relevant lithium-iron-phosphate battery production. Volkswagen put that sentence in its own 28 September release, then agreed to put Gotion High-tech inside three factories that are supposed to close the hole: PowerCo's cell plant under construction in Valencia, Gotion's cell plant in Šurany, Slovakia, and a new cathode-active-material works in Kenitra, Morocco.

The commercial reason is cost. LFP cells are cheaper and more robust than nickel-rich chemistries, and Volkswagen says their European market share could move from about 10 percent today to 40 to 60 percent by 2030. Those percentages are the group's forecast, not a shipment record. Without a regional LFP plant, cheaper volume electric cars stay tied to imported cells.

PowerCo keeps 51 percent of Valencia and remains majority owner. Gotion is expected to invest about €1.1 billion for the other 49 percent. The partners want the Spanish site as a European hub for PowerCo's Unified Cell in LFP form. Planned investment and jobs, Volkswagen said, stay as previously announced.

The other two ventures invert the shareholding. Gotion holds 51 percent of Šurany, which is meant to make LFP cells for cars and stationary storage, and 51 percent of Kenitra. PowerCo is expected to put about €470 million into those two sites by 2030 for 49 percent of each. Volkswagen Group, through its China investment company, has separately agreed to sell a 5.3 percent equity stake in Gotion. Because Volkswagen had already agreed not to vote part of its holding, the group says the sale does not cut the voting rights it actually exercises, and its board seat remains.

Thomas Schmall, Volkswagen's technology board member and PowerCo's supervisory-board chairman, called the production pact "a major breakthrough for both companies." Frank Blome, PowerCo's chief executive, called it the next milestone for the group's battery industry, one that strengthens supply-chain resilience and combines PowerCo's capabilities with a long-standing partner. Li Zhen, Gotion's chairman, presented the three sites and the cross-shareholding as a way to localise battery production in Europe. The agreement still needs Gotion shareholder approval and other regulatory clearances.

Volkswagen's English-language release does not publish a capacity number. Gotion's stock-exchange filing, reported by CnEVPost, does. Valencia is described as about €2.26 billion for 29.1 GWh of annual lithium-ion capacity. Šurany is about €480 million for 8.4 GWh. Kenitra is about €480 million for 100,000 tonnes of LFP cathode material a year, with output prioritised for the two cell plants. Construction scope in the filing excludes land and buildings, and each project is expected to take no more than five years. The board approved the plan on 28 September; a definitive investment agreement had not been signed when that filing was described.

Those gigawatt-hour figures should be read as Gotion's joint-venture scope, not as an undisputed nameplate for every building on each campus. Volkswagen's own release confirms the €1.1 billion Valencia stake and the €470 million PowerCo contribution without repeating the 29.1 GWh figure. Cells from the two European plants are meant to prioritise Volkswagen's European demand, the filing says, but purchase volumes remain subject to later offtake contracts.

Connor Watts, a Fastmarkets battery-demand analyst, read the Moroccan cathode plant as a sourcing shift. "The near-shoring of LFP CAM manufacturing to Morocco via this partnership is a welcome change from the status quo of sourcing LFP CAM from China, and will likely help Volkswagen to comply with future EU regulations surrounding local sourcing requirements," he said. Watts also argued that converting each company's plants into joint ventures is "emblematic of Europe's deepening reliance on Chinese battery technology companies," while calling shared ownership an improvement on wholly Chinese-owned plants in Eastern Europe.

That is the split inside the deal. Brussels has spent the year talking up domestic battery capacity, including a €1.5 billion Battery Booster Facility. Stellantis already has a CATL joint venture for LFP in Spain. Fastmarkets' Budapest conference kept returning to Northvolt as the cautionary case for going it alone. Volkswagen is not claiming it has invented a European LFP industry. It is buying process knowledge, cathode material and time by giving Gotion equity in the factories.

Until the clearances, the offtake contracts and the first cells exist, the 28 September announcement is a shareholding map. The missing European LFP capacity Volkswagen described is still missing.