VW’s PowerCo-Gotion Battery Joint Venture Bets €3.22bn on European Supply

The PowerCo-Gotion battery joint venture announced this week puts €3.22 billion ($3.68 billion) to work across three projects in Spain, Slovakia, and Morocco, extending Volkswagen Group‘s bid to control the full cell-to-vehicle supply chain in Europe. The deal is not yet final: no formal investment agreement has been signed, and it requires shareholder approval plus government clearances in both China and Europe. But the structure of the three ventures tells you as much as the headline number.

How the PowerCo-Gotion Battery Joint Venture Splits Control

The largest project is a €2.26 billion investment in Valencia, Spain, targeting 29.1 GWh of annual lithium-ion cell capacity. Gotion acquires a 49% stake in the existing PowerCo Spain entity via a capital increase, with PowerCo retaining 51%. That matters because Valencia is the centerpiece of the €10 billion “Future: Fast Forward” investment programme, which VW announced alongside PowerCo, SEAT S.A., and 49 partners. The gigafactory was originally designed to employ more than 3,000 people and begin Unified Cell production in 2026.

The two smaller projects flip the ownership logic. A €480 million investment in Šurany, Slovakia targets 8.4 GWh of annual capacity, with Gotion holding 51% and PowerCo 49%. A second €480 million venture covers a lithium iron phosphate (LFP) cathode materials plant in Kenitra, Morocco, also split 51-49 in Gotion’s favor, targeting 100,000 metric tons of annual output to supply both cell plants. Cells from Spain and Slovakia will prioritize Volkswagen’s European demand, though purchase volumes are subject to separate agreements yet to be signed.

The read here is deliberate calibration. VW keeps direct operational control over its most strategically exposed asset, the Valencia gigafactory at the core of its PERTE-backed Spanish industrial commitment, while ceding majority stakes to Gotion in the more specialized capacity in Slovakia and Morocco. It is giving ground at the edges to hold the center.

A Deepening Equity Relationship With a Fast-Growing Supplier

These three joint ventures sit on top of an existing equity position. Volkswagen Group China originally acquired its Gotion stake for approximately €1.1 billion, entering as the first global automaker to invest directly in a Chinese battery supplier and initially reaching approximately 26.47% of the company. The stake has since been diluted to 24.28% as of September 20, 2026, but VW remains Gotion’s largest shareholder.

Gotion is small by CATL or BYD standards, but it is growing fast. Global EV battery installations reached 34.0 GWh over the first seven months of 2026, up 44.2% year-on-year, lifting its market share from 3.9% to 4.7% and placing it fifth globally, according to SNE Research. For VW, Gotion’s LFP engineering capability and cost profile make it a logical partner for the volume end of the Unified Cell architecture.

That partnership on cell chemistry goes back further than this week’s deal. VW and Gotion previously agreed to develop and industrialize the first generation of the Unified Cell together at VW Group Components’ Salzgitter plant in Germany, with Gotion named as the technology partner for that cell factory. Former VW Chairman Herbert Diess said at the time that the goal was to become, alongside partners, one of the top three battery cell manufacturers worldwide.

One Piece of a Larger Supply Architecture

The Gotion joint ventures are one node in a network PowerCo has been assembling since its founding in 2022. The Standard Factory blueprint rolls out identical building layouts, machinery, and IT systems across PowerCo’s own gigafactories in Salzgitter, Valencia, and St. Thomas, Ontario, with those sites together targeting up to 200 GWh of annual capacity. Upstream, the Ionway joint venture with Umicore is building a cathode and precursor materials facility in Nysa, Poland, aimed at supplying enough material for roughly 2.2 million EVs a year by 2030. QuantumScape handles solid-state licensing; CATL and LG Energy Solution cover current MEB-platform demand.

It is worth noting that the Kenitra cathode plant sits alongside a separate, pre-existing Gotion Morocco gigafactory project entirely independent of this joint venture. Reuters reported in June 2024 that Gotion signed a standalone agreement with the Moroccan government for a facility with up to 100 GWh of eventual capacity and a total potential investment of up to $6.5 billion. The PowerCo joint venture is a distinct, smaller vehicle targeting cathode supply specifically.

PowerCo’s stated target is battery pack costs below $100/kWh, a figure that depends on running a standardized architecture simultaneously across every partner. The Gotion joint ventures lock in the LFP and cathode supply leg of that equation. The risk is execution: three projects across three countries, no signed investment agreement yet, and regulatory clearances still pending in both China and Europe. If any approval stalls, the supply sequencing that underpins the entire cost thesis comes under pressure.