Overview of Battery Gigafactory Plans Across Spain
Several multinational companies are pursuing large-scale gigafactories in Spain, mirroring a trend that promises abundant renewable energy and a robust electrification path for the automotive sector. Spain as a European hub has emerged as a key player, second only to Germany in regional production, drawing attention from firms eager to secure public support and favorable terms as they expand capacity for electric vehicle components. One notable development involves BYD, the Chinese giant behind Build Your Dream, which has signaled Finland and other European markets as possible locations alongside Germany and Hungary.
Volkswagen remains the most advanced project currently in motion. The German automaker is developing a 40 GWh gigafactory in Sagunto to manufacture battery cells capable of supplying around 800,000 vehicles annually. There is even consideration for a 50 percent growth to extend supply to other automakers, including Ford. The investment totals around 3 billion euros now, with potential escalation to 4.5 billion euros as the expansion progresses, and it is expected to create approximately 3,000 direct jobs and more than 30,000 indirect roles. This project received about 200 million euros in public aid, and Volkswagen chose Valencia over alternatives in Extremadura and Zaragoza where Chinese Envision and Indian Tata are exploring their own gigafactory opportunities.
Another major initiative aims at a second, more advanced facility. The Chinese company is planning an investment surpassed by 1 billion euros, with over 1,500 jobs anticipated during the initial phase. The proposed site is the Expacionavalmoral business park in Navalmoral de la Mata, Cáceres, occupying just over 1,088,000 square meters. VW’s Sagunto footprint is around 1.3 million square feet by comparison. The plan includes starting construction in the current summer, with production slated to begin in 2026 if all goes according to plan. The project has earned a Regional Interest Business designation, a status that accelerates administrative processes and reduces permit-related timelines and subsidies. There is a broader context of competition among regions to attract these investments, including Zaragoza and Zuera in Aragon, where Tata Motors, owner of Jaguar Land Rover, has been evaluating sites for possible expansion. Reports indicate Tata requested state aid from the UK for a factory in southwestern England, while Aragon emphasizes its renewable energy capacity as a competitive factor.
Slovak battery producer InoBat has also discussed a 32 GWh facility near Valladolid. Early projections suggested a 3,000 million euro investment, but a final decision has not yet been published. In parallel, BYD has begun preliminary talks about a potential gigafactory in Spain. At one point BYD and Ford explored the transfer of the former Saarlouis plant in Germany, which would close after competing with Valencia Almussafes for EV production, but the deal did not move forward.
Beyond these five projects, Stellantis is among the groups weighing options that might include Portugal and Spain, with the factory location leaning toward Portugal in the current assessments. Volkswagen plans to assemble cells produced at Sagunto at vehicle assembly centers in Barcelona and Navarra, though it has not decided whether to undertake this directly or via a partner. The aim is to curtail logistics costs by concentrating battery pack production near the final assembly sites. Electric vehicles rely on many cells, usually between 200 and 400 per car, arranged in blue block-like modules that will be manufactured at Sagunto, with heavy protective casings that still require careful handling. Valencia remains a central reference in the discussion of regional strategy and logistics planning.
In Navarra, regional authorities and Volkswagen Navarra executives recently discussed the project in detail, including potential designs for a new battery assembly facility located in Landaben. This concept had not been incorporated into the regional electrification plan previously approved by the Navarra government. Still, the latest talks suggest that Barcelona and Navarra could benefit from the second Perte VEC program, which addresses electrical vehicle components and production incentives. The broader impact of these activities is not simply about the factory footprint; it is also about how the technology and cell development may evolve in Spain.
The overall impact on industry and employment from a standalone battery assembly plant is significant, but it remains distinct from the Sagunto gigafactory, where primary cell development and advanced battery technologies are expected to concentrate.
Battery Cell Gathering in Barcelona and Navarra
The Volkswagen group intends to assemble cells produced at the Sagunt gigafactory and to operate vehicle production hubs in Barcelona and Navarra. The company has not committed to direct operation or through a third party. The strategic goal centers on reducing logistics costs by centralizing battery packs. Electric vehicles rely on 200 to 400 cells per car, organized into compact blue modules manufactured in Sagunto, with the surrounding casings remaining substantial in weight, meaning not all work should be performed within the car itself. Valencia remains a touchstone for understanding regional energy and manufacturing strategies.
Navarra’s regional leadership recently met with Volkswagen Navarra’s leadership to discuss the new project in greater detail and to examine potential designs for the factory. The envisioned battery assembly line for electric models built in Landaben (Pamplona) was not previously included in the Navarra regional interes project that supported the area’s electrification plan for the Volkswagen plant, but recent remarks by the regional manager suggest that Barcelona and Navarra could both benefit from the second Perte VEC program. In any case, the scale of industrial impact and job creation from an assembly plant will be different from that of the Sagunto gigafactory, where the focus is on technology development and cell production with broader implications for the regional economy.