VW plans to make Cupra all-electric; turn Seat's Spanish factory into EV hub

Volkswagen Group plans to turn Seat's Cupra performance marque into a full-electric brand and make only battery-powered cars at Seat's Martorell factory near Barcelona in Spain, VW CEO Herbert Diess said.

"CUPRA will become THE youthful and fully electric car brand – worldwide active, born in Spain," Diess wrote on Sunday in a LinkedIn post.

"Spain has great potential to become an e-mobility hub in Europe," Diess said after meeting Spanish King Felipe, Prime Minister Pedro Sanchez and Industry Minister Reyes Maroto Illera in Martorell.

The conversion of the plant could also involve battery-cell production in Spain, Diess said.

"Our plans are bold: Conversion of Martorell into a fully electric car plant. Local cell production in Spain, build up of infrastructure for fast charging and green energy," he wrote.

The project depends on support from the European Commission, he said. "We need the Commission’s support to make it happen," Diess said.

Seat presented its future lineup during the meeting, including its first full-electric car, the Cupra Born. The compact hatchback will be introduced this year. It will be built alongside the VW ID3 at VW Group's EV plant in Zwickau, Germany.

Diess did not say which electric cars would be built at Martorell, which currently produces Seat and Cupra models with combustion engines, including gasoline-electric hybrids.

VW launched the Cupra label three years ago to focus on sportier versions of Seat models that can generate more revenue per car.

Last week Spain's Industry Minister, Reyes Marot, said the government will use EU funds to create a public-private consortium with Seat and power company Iberdrola for the country's first factory for electric-car batteries.

The consortium would be open to other members and will help Spain begin local production of electric cars, Marot said.

"The project will allow the development of the necessary infrastructure, installations and mechanisms to autonomously and competitively manufacture a connected electric vehicle," she said.

Spain is due to receive some 140 billion euros in EU pandemic recovery funds by 2023, almost half in grants. It plans to channel a large chunk to financing major industrial projects that will help resuscitate and modernize its beleaguered economy.

Brussels is aggressively pushing for new battery production in Europe to reduce reliance on Chinese imports as automakers ramp up production of electric vehicles to meet tougher emissions regulations.

Reuters had previously reported the government was considering turning Nissan's main car plant in Barcelona, which is due to close in December, into a battery production facility to preserve thousands of jobs.

Maroto made no reference to Nissan's factory and did not specify where the new battery plant would be located but said it would help Seat, which had previously called battery manufacturing in Spain "essential," to produce electric cars at its Martorell plant.

Bloomberg and Reuters contributed to this report