Chinese investment surges in Spanish automotive and battery sectors

The Spanish automotive industry is undergoing a significant transformation driven by Chinese investment and shifts within the Volkswagen Group. Between July and September 2026, Chinese firms secured or negotiated investments exceeding 6 billion euros across five Spanish autonomous communities to establish local manufacturing hubs for vehicles and batteries.

In Valencia, Ford and Geely announced a joint venture to operate the Almussafes plant. Ford will retain 66% ownership while Geely holds 34%, with production of new SUV models scheduled to begin in 2028. This agreement aims to stabilize thousands of direct and indirect jobs at the facility.

In the battery sector, Gotion High-Tech has entered into agreements with Volkswagen’s PowerCo. A joint venture in Sagunt will see Gotion acquiring a 49% stake in a gigafactory for 1.1 billion euros, with production of LFP batteries expected to start in 2027. Gotion is also expanding its presence in Valladolid.

Simultaneously, the Spanish sector faces uncertainty regarding the future of the Seat brand. Volkswagen is increasingly prioritizing Cupra for profitable sales and electrification, leaving Seat with lower-margin entry-level models. This strategic shift toward Cupra has raised concerns about the long-term industrial stability of the Martorell plant and its extensive network of local suppliers.