Volkswagen Group’s PowerCo breaks ground on second cell gigafactory

The Volkswagen Group’s PowerCo broke ground for construction of its second PowerCo cell factory. Gigafactory Valencia will start production of the unified cell in 2026 and will directly employ more than 3,000 people in the future, with a further up to 30,000 indirect jobs potentially being created at suppliers and partners in Spain according to a recent study.

The Volkswagen Group has made battery technology a core element of its NEW AUTO strategy and has established PowerCo, a separate battery company. Since its launch in July 2022, PowerCo has decided three sites for cell factories: Salzgitter, Valencia and St. Thomas in Ontario/Canada, two of them already under construction.

The annual production capacity at Valencia is initially 40 GWh, but has the potential to be expanded to 60 GWh in the future. The cell factory is being built over an area of around 130 hectares in Sagunto, 30 km north of Valencia. Together with the planned supplier park, which will be built parallel to the PowerCo factory, the area amounts to 200 hectares.

Important factors in deciding to build the site in Valencia included the availability of low-cost green electricity, the regional research and innovation cluster, as well as the good transport infrastructure and proximity to the Group’s Spanish production sites. The Valencia gigafactory will supply unified cells to the vehicle plants in Martorell and Pamplona, among others.

PowerCo is aiming to manufacture sustainable batteries in Valencia. The cell factory will be supplied completely with green electricity generated by solar and wind power, for example by a new 250-hectare solar farm in the immediate vicinity. The raw material cycle will be closed directly on the site of the cell factory.

Gigafactory Valencia is a core component of the €10-billion investment program called “Future: Fast Forward” which the Volkswagen Group announced last year together with PowerCo, its Spanish subsidiary SEAT and 49 partners. Under the plan, Volkswagen will also electrify its car factories in Martorell and Pamplona as part of the PERTE program for electric and connected vehicles.

PowerCo bundles the Volkswagen Group’s global battery business throughout the value chain—from raw material supply and development to the construction and operation of gigafactories. By 2030, PowerCo and partners are expected to generate annual revenue of more than €20 billion.