Volkswagen Group LFP Battery Partnership Expands in Europe

Volkswagen Group, PowerCo and Gotion High-tech Expand LFP Cooperation

Volkswagen Group LFP battery partnership plans with PowerCo and Gotion High-tech will expand joint industrial production of LFP battery cells and cathode active materials. Announced on September 28, the agreement builds on cooperation between the companies that began in 2020 and establishes three planned joint ventures in Spain, Slovakia, and Morocco. The projects are intended to create a European hub for LFP-based Unified Cells, produce LFP cells for electric vehicles and energy storage systems, and manufacture LFP cathode material, respectively.

Valencia Project Targets 29.1 GWh Annual Capacity

At Valencia, the partners plan a facility with annual capacity of 29.1 GWh and estimated total investment of EUR 2.26 billion. Gotion High-tech plans to invest approximately EUR 1.1 billion for a 49% stake, while PowerCo is expected to hold the remaining 51% and control the joint venture. The planned site is intended to become a European hub for LFP-based Unified Cells, giving the partnership a dedicated production base for this battery chemistry within the region.

Surany Joint Venture Will Produce LFP Cells

The planned Surany joint venture in Slovakia is expected to produce LFP battery cells for electric vehicles and energy storage systems, with annual capacity of 8.4 GWh. The project forms the second manufacturing element of the proposed three-site structure and extends the partners' focus beyond passenger-vehicle batteries into stationary energy storage applications. Its completion, like the other transactions, remains subject to regulatory approvals and other customary conditions.

Kenitra Project Will Manufacture LFP Cathode Material

In Kenitra, Morocco, the partners plan a joint venture focused on LFP cathode active material, with annual production capacity of up to 100,000 metric tons. PowerCo is expected to invest a combined EUR 470 million for a 49% stake in each of the Surany and Kenitra joint ventures by 2030, while Gotion High-tech is expected to retain 51% and control both entities. This structure gives the two projects a different ownership arrangement from Valencia.

Three-Site Structure Covers Multiple Battery Production Stages

The three projects create a coordinated industrial footprint spanning Spain, Slovakia, and Morocco, with separate roles for cell production, Unified Cell manufacturing, and cathode material production. The arrangement builds on the partners' cooperation since 2020 and is designed around LFP battery technology across multiple stages of the production chain. The stated capacities and investments show the planned scale of the collaboration, while the proposed ownership structures define operational control at each joint venture.

Planned LFP Joint Venture Production Projects

The proposed industrial structure assigns a distinct production role and capacity to each location. Valencia is planned as the largest cell-related project by annual capacity and investment, while Surany will add LFP cell production for electric vehicles and energy storage systems. Kenitra will focus on cathode active material, creating a separate upstream manufacturing operation within the overall three-project framework.

Investment and Ownership Structure

PowerCo is expected to invest a combined EUR 470 million for a 49% stake in each of the Surany and Kenitra joint ventures by 2030, while Gotion High-tech is expected to retain 51% and control both entities. At Valencia, the ownership structure is reversed, with PowerCo retaining 51% and control while Gotion plans to hold 49%. Completion of the transactions remains subject to regulatory approvals and other customary conditions before the proposed arrangements can be finalized.

Industry Impact & Outlook

The proposed projects would create a multi-country LFP manufacturing network covering battery cells, Unified Cells, and cathode active material, potentially giving the partners a more integrated production structure across Europe and Morocco. The separate ownership arrangements also establish different control models for the three ventures. For the automotive industry, the most relevant next step is completion of regulatory approvals and other customary transaction conditions, after which the planned investments and production capacities can progress toward implementation. The development is particularly relevant to electric-vehicle and energy-storage supply chains using LFP technology.

Frequently Asked Questions

What are the three planned LFP joint ventures?
The three planned ventures are located in Valencia, Spain; Surany, Slovakia; and Kenitra, Morocco, covering different stages of LFP battery production. Valencia is planned as a European hub for LFP-based Unified Cells with 29.1 GWh of annual capacity. Surany is planned to produce LFP cells for electric vehicles and energy storage systems with 8.4 GWh of annual capacity. Kenitra is planned to manufacture up to 100,000 metric tons of LFP cathode active material annually. The transactions remain subject to regulatory approvals and other customary conditions before completion.