VOLKSWAGEN’S car battery cell plant in Spain will be located in Sagunto, 30 kilometres north of Valencia City.

The factory, costing around €7 billion to set up, will have around 3,000 employees and a production of 40 gigawatt hours a year, VW said on Wednesday.

The announcement confirms recent speculation about Sagunto having secured the site.

The facility will be VW’s first cell plant outside Germany.

It will make the company’s next-generation unified cells, the automaker’s technology chief, Thomas Schmall said in a statement.

Valencian president, Ximo Puig, described the decision as ‘the best business news in half a century’ for the region.

Prime Minister, Pedro Sanchez, last year announced a €4.3 billion investment to overhaul the country’s car manufacturing to focus on electric vehicles.

The Sagunto site beat off other options looked at by VW in Aragon and Catalunya, helped by its proximity to the Ford factory at Almussafes being just 50 kms away.

The German automaker signed an agreement with Ford in 2020 over the development of zero-emissions vehicles.

Almussafes will see two new electric car brands start to be produced in 2025.

Construction on the Sagunto plant will start by the end of the year and the factory will be ready to start production in 2026.

VW has launched a plan to build six large battery factories across Europe with an annual capacity of 240 GWh by the end of the decade, in a bid to become a leader in manufacturing electric vehicles.


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