On September 28, Gotion High-tech released two announcements detailing plans to jointly establish lithium battery and cathode material projects in Spain, Slovakia, and Morocco with Volkswagen Group. Concurrently, a subsidiary of Gotion High-tech intends to undertake the general engineering contracting for the first and second phases of Volkswagen Group's 29.1GWh lithium battery project in Spain. The combined contract value is 1.094 billion euros (approximately 8.64 billion RMB).
Plans to Construct Three Major Overseas Production Bases
According to the announcement, Gotion High-tech and its subsidiaries—Gotion High-Tech (HK) Limited, Gotion GmbH, and Gotion Power Africa S.A.S.—will form three joint ventures with Volkswagen Group and its subsidiaries, PowerCo SE and Power Holdco Lux S.A. These joint ventures will be located in Valencia, Spain; Šurany, Slovakia; and Kenitra, Morocco, to invest in and construct lithium battery and cathode material production bases. The total investment for these projects is estimated at 3.222 billion euros (approximately 25.45 billion RMB). Of this, the Gotion side will invest approximately 1.598 billion euros (approximately 12.62 billion RMB), with funding sourced from internal capital and self-raised funds.
The specific project plans are as follows:
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Valencia Base, Spain: The two parties plan to utilize the Valencia joint venture as the primary entity to invest in and construct a lithium battery project with an annual capacity of 29.1GWh. The total investment is estimated at 2.262 billion euros (approximately 17.87 billion RMB), with an expected construction period of no more than 5 years. The Valencia joint venture will be formed through a capital injection into PowerCo Spain by a European entity to be established under Gotion High-Tech (HK) Limited. Upon completion of the investment, Gotion will hold a 49% stake and PowerCo will hold 51%, making it a holding subsidiary of PowerCo.
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Šurany Base, Slovakia: The two parties plan to utilize the Šurany joint venture as the primary entity to invest in and construct a lithium battery project with an annual capacity of 8.4GWh. The total investment is approximately 480 million euros (about 3.79 billion RMB), with an expected construction period of no more than 5 years. The joint venture will be formed by Gotion GmbH establishing a new corporate entity in Šurany, Slovakia, which will subsequently receive a capital injection from PowerCo Lux. Upon completion, Gotion will hold a 51% equity stake and PowerCo will hold 49%, making it a holding subsidiary of Gotion.
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Kenitra Base, Morocco: The two parties plan to utilize the Morocco joint venture as the primary entity to invest in and construct a lithium iron phosphate (LFP) cathode material project with an annual capacity of 100,000 tons. The total investment is approximately 480 million euros (about 3.79 billion RMB), with an expected construction period of no more than 5 years. This joint venture will be formed by Gotion Power establishing a new entity in Kenitra, Morocco, which will then receive a capital injection from PowerCo Lux. Upon completion, Gotion will hold a 51% equity stake and PowerCo will hold 49%, making it a holding subsidiary of Gotion.
The battery cells produced by the Šurany and Valencia joint ventures will prioritize meeting Volkswagen's market demand in Europe, while the cathode materials produced by the Morocco joint venture will preferentially supply these two joint ventures.
Signing of €1.094 Billion Engineering Contracts
Beyond equity cooperation, Gotion High-tech will directly participate in the engineering and construction of the aforementioned Spanish battery project.
According to the announcement, Gotion High-tech's wholly-owned subsidiary, Gotion Spain Green Energy, S.L., intends to sign two general contracting agreements with the Spanish joint venture entity, PowerCo Battery Spain, S.A.U. The total value of these contracts reaches 1.094 billion euros (approximately 8.64 billion RMB), including:
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Phase I Dry Room General Contracting Agreement: The total contract price is 295 million euros (approximately 2.33 billion RMB). The scope of work encompasses the general contracting for the design and construction of clean dry rooms, as well as equipment procurement, installation, and commissioning for the Phase I power battery production line. The construction period is set for 472 days from the commencement date.
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Phase II Engineering General Contracting Agreement: The total contract price is 799 million euros (approximately 6.31 billion RMB). The scope of work covers the general contracting for the design and construction, alongside equipment procurement, installation, and commissioning for the Phase II power battery production line project. The construction period is set for 1181 days from the commencement date.
