China's Gotion High-tech announced an investment of €1.1 billion, or $1.25 billion, into Volkswagen's battery plant in Valencia, Spain, establishing itself as a major shareholder in the facility.
The investment is part of a broader partnership between Gotion and Volkswagen to develop a battery supply chain across Europe. The two companies plan to establish three joint ventures with combined investment of approximately €3.22 billion, or about $3.7 billion.
The joint ventures will produce lithium iron phosphate (LFP) batteries and cathode materials at facilities in Spain, Slovakia and Morocco. The Valencia site will serve as a European hub for LFP battery production. LFP chemistry offers lower costs and greater durability than other battery types, though typically with reduced driving range.
Volkswagen's battery unit, PowerCo, is a key partner in the ventures. Volkswagen will retain majority ownership of the Valencia plant despite Gotion's substantial investment.
