Volkswagen Group is reportedly in advanced discussions with Chinese battery manufacturer Gotion High-Tech over the creation of a joint venture for PowerCo’s battery cell factory under construction in Sagunto, Spain, according to Spanish trade publication La Tribuna de Automoción. The reported talks come as Automobilwoche reported that PowerCo regularly reviews strategic partnership opportunities while maintaining it has no plans to relinquish control of the Valencia gigafactory.
Joint Venture Proposal Under Discussion
According to the report, the negotiations are being led by Volkswagen Group Board Member for Technology Thomas Schmall and have progressed significantly, with Gotion Chief Executive Officer Zhen Li reportedly making several high-level visits to the construction site near Valencia.
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The proposal under discussion would see Gotion acquire a stake in the battery plant through a joint venture structure. While some reports suggested the Chinese company could become the majority shareholder, PowerCo has publicly stated it intends to retain control of the facility, indicating any agreement would likely leave Volkswagen’s battery subsidiary with a controlling interest.
The Sagunto facility, known by PowerCo as Gigafactory Valencia, is expected to manufacture Volkswagen’s Unified Cell battery technology for electric vehicles and supply the automaker’s production plants in Spain and Portugal.
Volkswagen already has close ties with Gotion, holding approximately a 25% stake in the Chinese battery maker, one of the world’s largest battery cell manufacturers.
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Gotion has also supported the development of Volkswagen’s Unified Cell technology and previously assisted with the construction of PowerCo’s battery cell factory in Salzgitter, Germany, where series production began in 2025. The company currently supplies battery cells from its Hefei plant in China for electric vehicles assembled in Spain, including the Cupra Raval and ID. Polo.
Potential to Broaden Customer Base
A partnership with Gotion could allow the Valencia factory to supply battery cells beyond Volkswagen Group brands.
Industry sources cited in the report said Gotion aims to provide batteries to additional vehicle manufacturers operating in Spain, with Ford’s Almussafes assembly plant identified as a potential customer. Chinese automaker Geely has also reportedly expressed interest in investing in the project.
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Expanding the customer base could improve production volumes and strengthen the long-term business case for the facility.
Construction Progress Faces Delays
The Sagunto project has reportedly experienced delays during its development.
Pre-series production is now expected to begin in December 2026, while full-scale manufacturing has reportedly been pushed back until at least summer 2027.
Recruitment has also progressed more slowly than planned. According to the report, only about 50 employees have been hired so far, compared with approximately 500 workers required for the pre-series production phase.
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PowerCo declined to comment directly on the reported negotiations but reiterated its commitment to the Spanish project.
The company said it regularly evaluates strategic collaboration opportunities but emphasized that it has no plans to surrender control of Gigafactory Valencia, while reaffirming its intention to continue developing the facility.
Separately, Gotion continues expanding its footprint in Spain through plans for a new facility in Valladolid, where it intends to establish cathode production and battery recycling operations following funding approvals under Spain’s Perte-VEC industrial program.