Spain to use EU Funds to stimulate local battery industry

Spain is gearing up to receive relief funds from the EU and it already has plans for how it is going to spend it. The European country is going to enter into a public-private partnership that will establish battery making factories. Spain wants to develop a battery supply chain that will encourage local electric vehicle production. It is an important part of the government’s economic recovery plan from the effect of the pandemic.

Signed on to the partnership are Volkswagen’s Spain subsidiary, SEAT, utility giant Iberdrola, Caixabank and Telefonica. The consortium is reportedly still open to new members.

Out of the $167 billion Spain will receive in 2023, as much as $6 billion may go into the venture. The country wants to be a leader in global electric vehicle manufacturing. This proposed plant would be the first of its kind in the country.

Volkswagen, which has been involved in the country for 70 years, supports the government’ choice of location for the plant. Nissan is closing down three manufacturing facilities in the area near Barcelona and the plants will simply be taken over and converted to suit battery making. This will help retain some of the jobs set to be axed with Nissan’s withdrawal. The conversion costs could be hefty though.

Volkswagen has been making bold bets on the future of electric mobility, going on a battery focused investment spree. It has committed to battery production in Sweden and Germany, even buying out partner Northvolt’s stake in a joint battery venture.

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SEAT and Iberdrola already have a history of working together. The two companies signed a deal last year to set up an electric vehicle charging network and “integrate Iberdrola’s infrastructure into the navigators of electric vehicles”. The partnership would produce 150,000 charging unit across the country, a welcome boost for Volkswagen who is planning to release a total of 8 fully electric models within the next 18 months.

“The project will allow the development of a set of actions to guarantee that Spain has the necessary infrastructure, installations and mechanisms to autonomously and competitively manufacture a connected electric vehicle,” Maria Reyes Maroto, the Minister of Industry, Trade and Tourism said.