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Volkswagen to build battery gigafactory in Spain

Volkswagen-Seat to build battery gigafactory in Spain. Image: Seat media

Volkswagen has agreed to build a battery gigafactory in Sagunto, a municipality in the province of Valencia

What is being heralded as one of the most ambitious industrial projects in recent decades will become a reality after all. The construction of the facility was in question due to the low allocation of funds and public aid offered by the government.

The project eventually was agreed upon after intense negotiations and the promise of an extra 230 million euros in funding.

The announcement was made on the last day of the deadline (November 9). A request was submitted for access to the European funds that were unlocked after the pandemic.

Explainer: Perte

This money, distributed through the Strategic Project for the Recovery and Economic Transformation (Perte) of electric vehicles, is managed by the Government. This has been the main stumbling block in a negotiation that became muddier and more difficult as time passed.

The president of Seat and Cupra and CEO of the Volkswagen group, Wayne Griffiths, said “This plan will drive the transformation of our industry and help create thousands of new jobs and keep the country competitive. The acceptance of the Perte by the Volkswagen Group and Seat is a sign of the firm commitment to Spain and Europe”.

The multinational expected around 1,000 million between aid and loans, but at first, it did not even reach 170 million. After a threat to back down on its plan, the funds increased to almost 400 million. That amount has been provisionally accepted.

Sagunto is a town of 65,000 inhabitants. It is well known for its exceptional old-town architecture and archaeology.

The municipality is well connected as the international airport of Valencia is only 35 km away.

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