The Volkswagen Group and SEAT S.A. have announced their joint plan to invest more than €10 billion ($10.6 billion) with their partners in the Future: Fast Forward project, in the event of a positive resolution of the PERTE VEC. The Group has confirmed that the funds will be used to electrify SEAT’s vehicle line-up and develop a battery gigafactory in Sagunto, a municipality located in the province of Valencia.

The announcement was made by the Group’s CEO, Herbert Diess together with Pedro Sánchez, Prime Minister of Spain; Ximo Puig, President of the Valencian Generalitat; Wayne Griffiths, President of SEAT S.A.; and Thomas Schmall, Member of the Board of Management of Volkswagen AG, Chief Technology Officer and Chairman of the Board of SEAT S.A.

The construction of the Sagunto plant is one of several projects under Future: Fast Forward – SEAT’s plan to drive electrification across Spain’s automotive industry. The project’s 62 partner firms – including national and international companies as well as benchmark firms covering the entire EV value chain – applied to the Strategic Project for Economic Recovery and Transformation program for the Electric and Connected Vehicle (PERTE VEC in Spanish).

Ahead of production commencing in 2026, the gigafactory will enter construction during the first quarter of 2023. On launch, the OEMs have confirmed that it will have an annual production capacity of 40 GWh and supply the total volume of its cells to SEAT’s Martorell and Pamplona plants.

During the event, the Volkswagen Group and Iberdrola Group signed a strategic agreement that will see a photovoltaic plant constructed and launched in to supply the Sagunto gigafactory with green renewable energy. The solar plant will cover 250 hectares and be located less than 10 kilometers from the Group’s new battery plant. In its first phase, the photovoltaic plant will supply 20% of the gigafactory’s total energy.

If the PERTE resolution is positive, the Volkswagen Group and SEAT S.A. will look to electrify its factories in Martorell and Navarra factories. Likewise, it will develop a sustainable e-ecosystem together with their partners and create a full battery ecosystem for EVs in Spain – from sourcing raw materials to assembling batteries.