German car making giant Volkswagen via its SEAT unit has chosen a site near Valencia for its second battery cell gigafactory as part of a €7bn ($7.69bn) plan to create a European Electric Vehicle Hub in Spain together with external suppliers along the entire value chain of e-mobility.
One of the reasons to pick Valencia was the availability to tap into nearby renewable power for its production - the same reason Tesla chose a site near Berlin for its first gigafactory in Europe that opened yesterday, with chief executive and US billionaire Elon Musk saying his company is working on a new manganese battery cell.
Although not directly related, the two announcements show how the market for battery cells and electric vehicles is booming in Europe, bringing a surging demand for green power with it.
“This project is highly important – for Volkswagen, for Spain, and for the whole of Europe,” said Thomas Schmall, member of the Volkswagen AG board responsible for technology and SEAT chairman.
“It’s our ambition to electrify Spain and we are willing to invest more than seven billion euro together with external suppliers for the electrification of our Martorell and Pamplona plants and the localisation of the battery value chain in Valencia.”
Gigafactory Valencia, which is slated to start production in 2026, would be Volkswagen’s second location for a massive battery plant after Salzgitter and the first one outside of Germany. The car maker aims for a production capacity of 40GWh per year at Valencia, but made its construction dependent on a positive outcome in an application to Spain’s PERTE e-vehicle programme.
The plant would be one of six gigafactories with an annual capacity of 240 GWh together with partners. VW group’s demand for premium cells will also be met by battery specialist Northvolt in Skellefteå, Sweden.
While VW increases its e-car ambition, competition is heating up in its German home market, where Tesla after a (for Germany) record speed construction of only two years has opened its first European battery cell and e-vehicle gigafactory in Grünheide near Berlin.
Both Elon Musk and German Chancellor Olaf Scholz came to the festive ‘Delivery Day’ of the first 30 Tesla model Y from European production.
The plant is slated to eventually churn out 500,000 electric cars a year. Tesla also chose the Grünheide site in Brandenburg, which surrounds Berlin, as the relatively flat north-eastern state is one of Germany’s top wind power producers, making sure the e-cars from the hyped manufacturer are made using green power.
German economics and energy minister Robert Habeck at the opening also stressed the energy security aspects of e-mobility.
“The road to electro-mobility is another step away from oil imports,” Habeck said.
“We also need more Tesla speed for other infrastructure projects, such as the expansion of renewable energies and the power grid.”
Tesla CEO Musk at the Grünheide event according to online e-mobility publication Electrek announced his company sees potential in battery chemistry with a manganese-based cathode, adding the industry needs to focus more on the battery supply chain down to the minerals.
“I think there’s an interesting potential for manganese,” Musk is quoted as saying.
For the foreseeable future Tesla will focus on nickel-based chemistries for longer-range vehicles and iron-phosphate for shorter-range vehicles, however, he is reporting saying.