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Volkswagen 40-GWh Battery Factory in Spain Will Be In Sagunto

When we talked about how fundamental the unified cell was to Volkswagen’s strategy back in July 2021, we already knew that its third 40-GWh battery factory would be in Spain. The plan was to spend €4 billion ($4.2 billion at the current exchange rate) on it. Now we know where the cell factory will be (Sagunto) and how much money it will involve (€10 billion, or $10.525 billion).
Thomas Schmall had already announced the cell factory in Spain, but now we know where it will be: Sagunto 15 photos
Photo: Volkswagen
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That’s not only €6 billion more than Volkswagen talked about in 2021. According to the German group, it is also the single largest industrial investment ever made in Spain. Portugal must be deeply disappointed to have lost such a massive investment: Spain's neighboring country was among the places that could have received it when that was still under discussion.

It may seem that Volkswagen spending so much more on the plant does not make sense without an expansion in the production capacity (40 GWh per year). However, the explanation is simple: the German carmaker said these $10 billion are what the company and its partners will invest.

In fact, Thomas Schmall said the company will spend “more than €3 billion” ($3.16 billion) on the plant. Supposing he means the €4 billion we already knew about, the other €6 billion were not clarified by the company.

Reuters came to the rescue to explain that: Volkswagen will spend €3 billion on four Seat plants in the country and €1 billion ($1,05 billion) in Pamplona, which has another plant. Volkswagen said the investments would allow EV manufacturing in Martorell and Pamplona. That’s €8 billion ($8.42 billion).

According to Reuters, Iberdrola will invest €500 million ($526,26 million) in a solar park that will provide renewable energy to the cell factory. The other €1.5 billion must come from similar expenses from other partners and suppliers.

The weird part is that construction will start in 2023, and operations should begin only in 2026. If you remember, the company disclosed on May 5 sketches of the entry-level EVs it wants to build in Spain, underpinned by the MEB Lite architecture. Production should start in 2025, one year earlier than the battery plant will be able to deliver its goods. Selling affordable EVs with batteries made elsewhere does not seem to match the price proposition, even if that is only for one year.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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