Volkswagen Group may give Gotion majority control of PowerCo’s Sagunto gigafactory

One of the projects created by the Volkswagen Group to lessen Europe’s reliance on Asian suppliers could ultimately come under the control of a Chinese company. That is reportedly the scenario being discussed for PowerCo’s battery-cell gigafactory in Sagunto, Valencia.

According to Spanish newspaper La Tribuna de Automoción, citing industry sources, the Volkswagen Group is in advanced talks with Gotion over the Chinese company taking a majority stake in the gigafactory.

The process has reportedly already included visits by Gotion chief executive Li Zhen, as well as technical meetings involving teams from both companies to assess whether the deal is viable.

The Sagunto plant forms part of the Volkswagen Group’s strategy to manufacture its own battery cells in Europe and reduce its dependence on Asian suppliers. The original plan envisaged six European gigafactories, although that target has since been cut in half.

Chinese majority stake in the PowerCo Sagunto gigafactory?

According to the sources quoted by the Spanish newspaper, and with no official confirmation so far, the option under consideration would involve setting up a joint venture in which Gotion would hold the majority shareholding.

The discussions concern only the Spanish facility and do not cover PowerCo’s other operations.

When asked by Reuters, PowerCo neither confirmed nor denied that negotiations were taking place. The company said only that it regularly assesses strategic opportunities and potential partnerships with other parties.

However, it stressed that it remains committed to the Sagunto project and has no plans to hand over control of the factory. Gotion did not respond to requests for comment.

Volkswagen Group and Gotion’s existing partnership

The closer relationship between the two companies is not coincidental. The Volkswagen Group is Gotion’s largest shareholder, holding 25.56% of its share capital, and has maintained a strategic partnership with the Chinese manufacturer for several years.

Gotion is also among the companies selected to supply the unified cells that the German group will use between 2026 and 2032. Until the Sagunto facility begins operating, it will continue supplying Volkswagen with cells manufactured in China.

A project affected by delays

The Sagunto factory is a key element of the Volkswagen Group’s electrification strategy on the Iberian Peninsula. Its cells are expected to supply electric models built by SEAT in Martorell, Volkswagen in Navarra, and Volkswagen Autoeuropa in Palmela.

The project has nevertheless encountered several setbacks. Pre-series production, originally scheduled to start in September this year, has been postponed until December.

Recruitment is also well below the stated targets. Of the roughly 500 new jobs planned for 2026, only about 50 are believed to have been filled so far.

Should the joint venture proceed, Gotion would gain a second industrial base in Spain, adding to the project it is already developing in Valladolid: a cathode production and recycling plant acquired from Slovakia’s Inobat, involving investment of more than €950 million.

According to La Tribuna de Automoción, Gotion also intends to use the Sagunto site to supply cells to other manufacturers based in Spain, in addition to the Volkswagen Group’s various brands.