BERLIN, (Reuters) – China’s Gotion will invest €1.1 billion ($1.25 billion) in Volkswagen’s battery plant in Valencia under a broader plan to jointly develop a European battery supply chain.
Chinese companies are boosting their presence in Europe ahead of expected moves by Brussels to shield EU industry from cheaper imports, including electric vehicles from China threatening to slash the market share of Volkswagen and other EU heavyweights.
Gotion’s investment allows it to take a 49% stake in the Valencia plant of Volkswagen’s battery business PowerCo, which will remain the majority shareholder, VW said.
The plant will become a European production hub for lithium iron phosphate, or LFP, batteries.
PowerCo, for its part, will invest €470 million in two Gotion sites – a cell factory in Šurany, Slovakia, and a new production facility for cathode material in Kenitra, Morocco – for a 49% stake in each.
VW technology chief Thomas Schmall said the move “marks a major breakthrough for both companies and brings us one step closer to the forefront of electric mobility”. VW is Gotion’s largest single shareholder, with 24%. It said it had agreed to sell a 5.3% stake – worth $373 million according to LSEG data – to an unnamed buyer.
The German group is currently undergoing the most radical overhaul in its history, cutting 100,000 jobs, and also wants to drastically reduce its sprawling investment portfolio.
($1 = 0.8800 euros)
($1 = 6.7103 Chinese yuan)
Reporting by Rachel More; editing by Thomas Seythal and Kevin Liffey
