Gotion in talks for majority stake in Volkswagen PowerCo Sagunto gigafactory

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

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

The process is said to have already included visits by Gotion chief executive Li Zhen, as well as technical meetings between teams from both businesses to assess whether the deal is viable.

The Sagunto plant is central to the Volkswagen Group’s strategy to manufacture its own battery cells in Europe and lessen its dependence on Asian suppliers. The original plan called for six European gigafactories, although that target has since been cut by half.

Chinese majority stake in the Sagunto gigafactory?

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

The talks concern the Spanish site alone and do not extend to PowerCo’s other operations.

When approached by Reuters, PowerCo neither confirmed nor denied that negotiations were taking place. The company stated only that it regularly considers strategic opportunities and potential partnerships.

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.

The closer relationship between the two companies is not coincidental. The Volkswagen Group is Gotion’s largest shareholder, holding 25.56% of its 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 made in China.

Delays at Volkswagen Group’s Sagunto project

The Sagunto factory is a key part of the Volkswagen Group’s electrification plans for the Iberian Peninsula. Its cells are intended to supply electric models built by SEAT in Martorell, Volkswagen in Navarre, and Volkswagen Autoeuropa in Palmela.

The project has nevertheless encountered several setbacks. Pre-series production, initially scheduled to begin in September this year, has been pushed back to December.

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

Should the joint venture go ahead, Gotion would gain a second industrial base in Spain, alongside the project it is already developing in Valladolid: a cathode recycling and production plant acquired from Slovak company 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.