Iberdrola to invest EUR 500m to electrify Volkswagen gigafactory in Spain

Spanish utility Iberdrola SA (BME:IBE) on Thursday announced a plan to invest around EUR 500 million (USD 528.5m) in renewable energy, energy efficiency and other electrification solutions for Volkswagen’s new electric vehicle (EV) battery factory in Spain.

The plan will include construction of a 250-hectare (618 acres) solar farm not far from the gigafactory’s location in Sagunto, Valencia, where Volkswagen intends to build facilities to manufacture 40 GWh of batteries using only renewables.

The German car maker and its Spanish unit SEAT said separately that they will invest EUR 10 billion in the EV business in Spain as part of a wider partnership with over 60 domestic and international companies. The investment will go towards transforming two existing SEAT sites in Spain to manufacture small e-cars, building the EUR-3-billion battery gigafactory in Sagunto, and establishing a whole battery chain, including lithium extraction.

Construction of the Sagunto factory will start in 2023, while the first batteries are set to roll off in 2026. The first Spain-made EVs will come out in 2025, the Volkswagen group said.

Volkswagen and SEAT are seeking funds from the Spanish state for the whole endeavour. They applied for the so-called PERTE financing tool, a chest filled with mostly Covid-19 relief funds which are awarded through specific tendering procedures.

(EUR 1.0 = USD 1.057)

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