VW increases EV investment plan in Spain

SAGUNTO, Spain -- Volkswagen Group will invest 10 billion euros ($10.6 billion) to make electric vehicles and batteries in Spain, CEO Herbert Diess said, about 3 billion euros more than it had previously committed.

VW also announced a partnership deal with Spain's largest power utility, Iberdrola, which will set up a solar park to partly power a battery cell plant to be built in the municipality of Sagunto near Valencia.

VW said in March it would invest 7 billion euros to build a battery plant and produce EVs at its two car factories in Spain, but Diess said that figure had been raised to 10 billion with new partners on board.

"We will electrify the second-largest car producer in Europe (Spain) with a new gigafactory of batteries and the production of electric cars in two plants," Diess said.

The plan was to create "a full ecosystem of suppliers from lithium extraction to the assembly of batteries," Diess said at event in Sagunto on Thursday.

Diess was visiting the site where the factory will be built with Spanish Prime Minister Pedro Sanchez.

VW aims to start building the 40-gigawatt-hour (GWh) plant in the first quarter of 2023, with series production scheduled to start by 2026. By 2030, the site will employ more than 3,000 people.

VW plans to have six battery cell production plants in Europe by 2030 with a joint capacity of 240 GWh, in an attempt to control as much of the supply chain as possible. The plan is key step in VW's bid to outdo Tesla and become the world's top-seller of EVs.