Gotion shareholders approve €3.22 billion battery joint ventures with PowerCo

Shareholders approve the package

The vote, disclosed in Gotion's third-quarter report on 29 October, advances the partnership announced in September. Gotion and its subsidiaries will contribute about €1.60 billion, PowerCo about €1.62 billion, ESS News reported.

The three ventures cover LFP cell production in Valencia, Spain and Šurany, Slovakia, plus cathode active material in Kenitra, Morocco. Valencia is the largest: 29.1 GWh of annual cell capacity and €2.26 billion of planned investment, with PowerCo holding 51% and Gotion 49%, according to ICEX-Invest in Spain. Šurany adds 8.4 GWh for about €480 million, with Gotion at 51% and PowerCo at 49%, ESS News reported; Russpain gives the Slovak plant's planned capacity as 10 GWh. Gotion announced that plant as a joint venture with Slovak company InoBat in 2023; PowerCo has now been folded into the plans, Fastmarkets reported. Kenitra is planned at 100,000 tonnes a year of cathode active material for roughly €480 million, again with Gotion at 51%. Gotion's 28 September exchange filing put the three plants' combined capacity at 37.5 GWh and 100,000 tonnes of cathode material a year, with Gotion investing about €1.6 billion and Volkswagen a similar amount, SCMP reported.

Morocco supplies the cell plants

Kenitra is the link in the chain. The cathode material is intended primarily to supply the two European cell plants, ESS News reported. Morocco's phosphate-rock reserves are estimated at about 68% of the global total, according to Russpain. Gotion signed an agreement on 6 June 2024 for a battery plant in Kenitra valued at approximately 12.8 billion dirhams, Russpain reported, and the African Development Bank approved a €100 million loan for its Moroccan subsidiary in July, Fastmarkets reported.

Gotion's €1.60 billion total covers all three ventures. Its Valencia stake alone will exceed €1.1 billion, ICEX-Invest in Spain reported, paid through a capital increase in PowerCo Spain. Russpain said Volkswagen has said Gotion will contribute up to €1 billion across the broader industrial plan.

The Valencia plant is already under construction and is meant to become a European production centre for unified cells built on LFP chemistry, ICEX-Invest in Spain reported. PowerCo is expected to put around €470 million into the Slovakian and Moroccan projects by 2030, according to Fastmarkets.

Why LFP and why now

LFP uses phosphate alongside lithium and iron. It avoids the nickel and cobalt that other chemistries depend on. Volkswagen says it is pursuing the technology for cost, durability and thermal stability. Europe currently lacks significant production capacity for this type of battery, according to ICEX-Invest in Spain.

Volkswagen estimates LFP could account for 40% to 60% of the European battery market by 2030, Russpain reported. Frank Blome, chief executive of PowerCo, said the collaboration "strengthens the resilience of our value chain" and combines PowerCo's capabilities with a partner that has a long track record.

Cutting reliance on China

Volkswagen wants to cut dependence on materials imported from China while working with a Chinese manufacturer to do it. Moving cathode production to Morocco should help it meet future EU rules on local sourcing, Fastmarkets analyst Connor Watts said. Volkswagen also announced plans to sell a 5.3% stake in Gotion to Hefei Construction Investment while remaining a strategic investor with board representation, Fastmarkets reported. The relationship dates to 2020, when Gotion began supplying cells to Volkswagen and became a strategic partner for PowerCo.

What happens next

Shareholder approval advances the projects but does not close them. The September agreement required approval by Gotion shareholders and competition authorities in both countries, ICEX-Invest in Spain reported. ESS News reported that regulatory clearances and customary closing conditions still applied, and that cell purchase volumes, supply guarantees and final commercial terms remain subject to later agreements.

The Valencia plant, at Sagunto, is scheduled to begin operating in 2027, with initial capacity of up to 30 GWh a year, revised up from a previously envisaged 20 GWh, Russpain reported. That figure differs from the 29.1 GWh cited by ICEX-Invest in Spain. No firm start date for supply from the Kenitra cathode project has been confirmed.

Gotion Power Morocco said in October it planned to begin commissioning production equipment during the week of 20 October, according to local reporting cited by ESS News. That schedule concerned the cell factory's equipment, not a production start for the PowerCo cathode venture.

Until volumes and terms are fixed, the €3.22 billion is a commitment rather than a supply contract.