What is a Gigafactory?
The project is presented as a strategic venture that will be owned by the company due to its clear impact on employment. During the construction phase, approximately 8,900 temporary direct jobs and 10,200 indirect jobs are expected. By 2026, when the factory becomes operational, about 4,200 direct positions will be required, with 92% in production and 8% in management and administration. Indirect employment could reach 27,000, and incentivized positions around 11,000.
The town council anticipates potential discounts for incentives tied to job creation and other investments. Through 2027 and 2031, it projects annual property tax receipts of 2,565,304 euros and 5,842,331 euros from the Economic Activity Tax. By 2032 the IBI is projected to stay at 2.5 million euros while the IAE rises to 9,565,304 euros, totaling 12,130,608 euros.
Volkswagen moves on with Sagunto gigafactory after raising 200 million public funds
Alongside municipal taxes, the Regional Strategic Project has streamlined the gigafactory process. Officials note that the direct and indirect effects on regional and central treasuries will be significant, especially through value-added tax, income tax, corporate tax, and the anticipated rise in real estate activity in the region.
Batteries from the project will bring in more than 8 million euros in annual taxes to Sagunto’s treasury, assuming no tax relief for job creation. The city hall continues to evaluate whether the multinational will subsidize IBI and IAE rates as claimed. The German company plans a total investment of 4.5 billion euros during the construction period and successive years from 2023 to 2026. Of this, more than 3,000 euros correspond to the initial phase, with the remainder directed to facility expansion.
The management has stated the project is a strategic asset for job creation. During construction, about 8,900 temporary direct jobs and 10,200 indirect jobs will be generated. By 2026, when the facility is fully operational, roughly 4,200 direct jobs will be required, with production staff making up 92 percent and administration 8 percent. Indirect employment could total 27,000, with around 11,000 incentivized posts.
Ximo Puig confirms gigafactory work will start in first quarter of 2023
Without concessions for potential bonuses related to job creation and other investments, Sagunto City Council anticipates annual IBI receipts of 2,565,304 euros and IAE receipts of 5,842,331 euros through 2031. By 2032, IBI is projected to stay at 2.5 million euros and IAE to reach 9,565,304 euros, totaling 12,130,608 euros.
Alongside municipal taxes, the Regional Strategic Project continues to stress that the combined direct and indirect effects on treasury reserves will be meaningful, particularly in VAT, income tax, corporate tax, and related real estate activity increases in the region.
Tax incentives
Volkswagen has asked for tax incentives on any license related tributes and public law income. The company also seeks urgent administrative action to halve planning, building management, environmental approval times, and the tools needed to commission the facility. It requests exemptions from municipal building permits or other authorizations and expects the Generalitat to guarantee urban control as a condition for the project.
Agility
Officials approved a decree law in August to accelerate land expropriation for strategic projects in Valencia, including the Sagunto gigafactory. The regulation also supports energy provisions for the facility, with Iberdrola’s plans to supply 20 percent of the factory’s energy needs with a 150 MW photovoltaic installation. The project spans about 260 hectares, roughly 500 football fields, across two areas in the Camp de Morvedre region.
500 football fields
In addition to the 4.5 billion euro investment from Volkswagen, Iberdrola plans a 500 million euro investment in the self-consumption facility. The solar installation is designed to deliver about 150 MW and will occupy hundreds of thousands of solar panels across a wide land area to power the gigafactory.