VW, Gotion ramp up battery production in Europe, Morocco amid rising EV demand

Volkswagen Group and its Chinese partner Gotion High-tech have stepped up a gear in tapping global demand for electric vehicle (EV) batteries with plans to invest a combined €3.22 billion (US$3.66 billion) to set up three production lines in Europe and North Africa.

The factories, to be jointly owned by the German marque and China’s fourth-largest EV battery maker, would be capable of delivering 37.5 gigawatt hours (GWh) of lithium-ion battery capacity and 100,000 metric tons of cathode materials a year, Gotion said in an exchange filing on Monday.

The signings were “in line with Gotion’s overseas expansion strategy to consolidate our footprint in the global EV battery market while further deepening our long-term strategic partnership with Volkswagen”, the company said.

One GWh of EV battery power is enough to run about 20,000 pure electric cars with a range of 500 km (311 miles), according to industry officials.

Gotion said it would invest about €1.6 billion to build the three manufacturing facilities in Spain, Slovakia and Morocco, with VW putting in a similar amount.

The biggest project, an EV plant in Valencia, Spain, operated by VW subsidiary PowerCo, requires a total investment of €2.26 billion to upgrade it to deliver an annual battery capacity of 29.1 GWh.

“Chinese-developed EV batteries are in high demand outside mainland China,” said Chen Jinzhu, CEO of the Shanghai Mingliang Auto Service consultancy. “Collaborative efforts with VW to build plants in Europe will give Gotion easy access to the market as it quickens its go-global pace.”

Gotion, based in Hefei, the capital of eastern China’s Anhui province, is 24.3 per cent owned by VW.

Battery cells from the European factories would be mainly supplied to VW, and Gotion would be involved in the development of key battery cell production zones on the continent, according to the exchange filing.

In the first seven months of 2026, Gotion delivered 34 GWh of battery capacity to EV assemblers, up 44.2 per cent from a year ago, according to Seoul-based SNE Research.

Its global market share between January and July stood at 4.7 per cent, compared to 3.9 per cent in the same period last year.

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Gotion, along with its three bigger domestic rivals – Contemporary Amperex Technology Ltd (CATL), BYD and CALB – commanded a combined 64.4 per cent share of the global EV battery market in the first seven months of the year, SNE data showed.

China’s manufacturing heft had given its battery makers a cost advantage, with average prices in the country falling 13 per cent year on year to US$84 per kilowatt hour (KWh) in 2025, an annual survey by BloombergNEF showed.

Last week, CATL said it had cleared all regulatory hurdles for its €7.3 billion mega factory in Hungary, a development that analysts expected would help the world’s largest EV battery maker extend its reach to international marques like BMW and VW.

The production base in Debrecen, the second-largest city in Hungary, has an intended production capacity of 100 GWh per year.

Separately, VW planned to reduce its Gotion holdings to 19 per cent by selling 96 million shares of the company to an investment firm controlled by the Hefei government for 2.3 billion yuan (US$342.6 million), the battery maker said in another exchange filing on Monday.