VOLKSWAGEN PARTNERS WITH IBERDROLA AND ANNOUNCES A $10 BILLION ELECTRIC VEHICLE INVESTMENT
The German car giant Volkswagen and the Spanish energy giant Iberdrola have partnered to increase Spain’s electric car production tremendously. Volkswagen’s $10 million initiative includes building 4 factories for their Spanish brand SEAT, renovating 2 existing SEAT factories, and constructing a 618-acre gigafactory. Iberdrola is set to invest 500 million euros in a solar plant that will power much of the Volkswagen gigafactory, which will be built in the Sagunto Municipality of the Valencian Community.
Representatives from Volkswagen met with Spain’s President and King last year and discussed, “transforming the industrial infrastructure and ecosystem for electric mobility” in Spain. This initiative is especially significant for Spain as Volkswagen had the second-highest percent market share in Spain in 2020, second only to its subsidiary SEAT; the companies’ shares combined make up around 13% of Spain’s passenger car market.
Volkswagen first announced its intentions to invest in the Spanish electric car market in March, listing $7 billion as its intended spend. A few days ago, however, the company’s CEO announced an over 40% increase in investment that brought the total up to $10 billion. In investing this final amount, the company is estimated to employ over 3,000 employees.
Even though it has been confirmed by Volkswagen’s CEO Herbert Diess, the multi-billion dollar investment might be still contingent on government funds. When the initiative was first announced in March, Volkswagen representatives said that “the project depends on receiving government funds”. Those funds are the European PERTE pandemic-relief funds, which have yet to be allocated to a project. As of March, the German company had bid for 3 billion euros worth of that fund, which at the time was about 43% of the amount that Volkswagen planned on investing. The current contingency of the plan on the PERTE funds is unclear.
Nonetheless, Volkswagen clearly has intentions on expanding its electric vehicle production in Spain and in the rest of Europe. The company’s long term plans include building six European factories by 2030; if many of these factories were to be Spain-based it would be highly beneficial to the Spanish government, as they, according to Volkswagen themselves, “own a large responsibility in reaching the targets of the European Green Deal by 2030”.
By: Luca Glickman
5/22/2022 12:00:34 pm
5/23/2022 11:12:58 pm
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