The Volkswagen Group will apply to Spain’s Electric Vehicle PERTE program after the Spanish government announced it will open the call for applications on 1 April 2022. The Group’s ‘Future Fast Forward’ program would include a total investment of more than €7 billion together with external suppliers along the entire value chain of e-mobility.

Furthermore, Volkswagen announced Valencia as the dedicated location for a new battery cell gigafactory in Spain. All plans are still subject to final approvals, foremost the PERTE submission.

Spain created the Strategic Projects for Economic Recovery and Transformation (PERTES) in December 2020; the PERTES program encompasses projects with a structural transformational impact on strategic sectors or with disruptive and ambitious research and innovation phases, going beyond the state of the art in the sector, followed by a first industrial deployment. These are projects of a strategic nature, with a significant potential to have a knock-on effect on the rest of the economy, and which require collaboration between administrations, companies and research centers in order to scale up their operations.

On 13 July 2021, the Council of Ministers approved, as the first PERTE, the development of an ecosystem for the manufacture of the Electric and Connected Vehicle, within the scope of the Recovery Plan. This is the PERTE to which the Volkswagen Group will apply.

This project is highly important—for Volkswagen, for Spain, and for the whole of Europe. It’s our ambition to electrify Spain and we are willing to invest more than seven billion euro together with external suppliers for the electrification of our Martorell and Pamplona plants and the localization of the battery value chain in Valencia.

—Thomas Schmall, member of the Volkswagen AG Board of Management responsible for Technology and chairman of the SEAT S.A. Board of Directors

Gigafactory Valencia would be Volkswagen’s second location after Salzgitter and the first one outside of Germany.

In Valencia, we are planning to build up nothing less than next-generation cell production: A standardized factory, producing Volkswagen’s cutting-edge unified cell and supplied with renewable energy, enabling a sustainable battery production. It will create a strong pulling effect in the whole battery value chain in Spain and beyond.

—Thomas Schmall

Volkswagen aims for a production capacity of 40 GWh annually and plans to employ more than 3,000 people in Valencia. To be ready to start production in 2026, construction of the plant should begin by the end of the year. The first milestone must be the positive outcome of the PERTE submission and finalized permits, the Group said.

In total, Volkswagen plans to build six Gigafactories in Europe with an annual capacity of 240 GWh together with partners. The group’s demand for premium cells will be met by Northvolt in Skellefteå, Sweden. To speed up the roll-out of all further cell factories coming up for Europe, Volkswagen has founded a European corporation for cell development and manufacturing and keeps the option open to integrate partners or investors. Its center of gravity—and a blueprint for all following plants—will be the Salzgitter plant in Germany starting production in 2025.