Volkswagen Plant In Sagunto – The Auto Industry´s Biggest Investment Yet!

When completed in 2026, the Volkswagen plant in Sagunto will employ 3.000 people, produce 40 GwH per year, and completely transform this historic Valencian town.

It has finally been announced that one of the world’s largest car manufacturers has decided to open a battery factory in Valencia. In the Valencian town of Sagunto, a massive Volkswagen plant will be built to produce electric batteries.

The Volkswagen plant will be a gigafactory, with a capacity of 40 GWh per year and a workforce of over 3,000 people. This decision was made today following a year-long battle with two provinces, Extremadura and Aragón, which also wanted to build this gigantic Volkswagen plant in their backyard.

The announcement was made by Seat’s chairman, Wayne Griffiths, and Thomas Schmall, Seat’s chairman of the board of directors, during a press conference in which the company’s results for 2021 were presented. The management has taken advantage of this opportunity to explain why the Volkswagen plant will be built in Valencia rather than elsewhere. 

This decision was made based on over 100 different criteria, including logistics, port capacity, qualified personnel, and the speed with which work can begin, among others. And Sagunto was at the top of the list.

The Volkswagen plant is a major component of Volkswagen’s massive investment in electric vehicle technology, for which the German automaker has set aside 7 billion Euros. Around 3 billion will be used for existing factories in Martorell and Pamplona to begin electric car production, with the remainder going to the Sagunto gigafactory for electric car batteries. The Spanish government has promised to invest in this venture as well, and construction on the Volkswagen plant in Sagunto will begin as soon as the money arrives.

When completed, the Volkswagen plant in Sagunto will employ approximately 3.000 people and have an annual capacity of 40 gigawatts. However, it will have a huge knock-on effect on the Valencian economy, as new supply lines will be established and many more people will be employed.

The Sagunto Gigafactory will be the group’s third plant in Europe. According to the chairman of Seat, this is not just a simple investment, but a move that will most likely change the entire automotive industry in Spain.

The batteries are expected to be manufactured at the Volkswagen plant in 2026. Construction will begin this year, as soon as funds from the Spanish government are available and all necessary permits are obtained.

“We will manufacture the next generation of cells in Valencia, and it will be a standardised factory that will produce the innovative Volkswagen unified cell and will be powered by renewable energy, allowing for the production of batteries to be sustainable. The plant will also have a significant impact on the entire battery value chain, not just in Spain, but throughout Europe.” Schmall asserted.

For a long time, it was expected that the Volkswagen Plant would be built in Sagunto, but the company waited for the Ministry of Industry to launch the Strategic Project for Economic Recovery and Transformation (PERTE) before making the announcement. This aid was officially confirmed last Friday, so the announcement was only a matter of days away.

volkswagen plant sagunto
Soon to be transformed – Sagunto

The future gigafactory will be built in the Parc Sagunt logistics hub, which is currently in its second phase of development. The Generalitat Valenciana has accelerated land preparation in order to facilitate both the German conglomerate and future investments in the area. A few weeks ago, Valencia’s Territorial Commission for Urbanism approved an expropriation project. 

Once the expropriation is completed, the government will own 5.6 million square metres instead of the current 1.3 million square metres, which will house not only a new Volkswagen plant, but also many other announced projects that will be financed by European funds.

Automakers are racing to build battery plants to power their expanding electric fleets, with European car manufacturers focusing on increasing local capacity and reducing reliance on Asian suppliers, who currently account for 90 percent of global production.

Volkswagen has set a goal of joining forces with partners to build six large battery factories across Europe by the end of the decade.

The first, Northvolt plant in Sweden, in which Volkswagen owns a 20% stake, will begin commercial production this year. A second facility in Salzgitter, Germany, will be built by 2025 in collaboration with China’s Gotion High-Tech, of which Volkswagen owns 26%. Volkswagen plant in Sagunto will be the third to begin production.

The battery gigafactory in Sagunto will not be solely owned by Volkswagen, but will be co-owned by other companies. These have yet to be determined, but will most likely include other European automakers.

This article is brought to you by Expat Hub Valencia, a property buying agent and a property lawyer in Valencia. Using the Expat Hub’s services, you will be able to successfully navigate Valencia’s complicated property market in no time.

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