Volkswagen Group and Gotion High-tech, its Chinese partner, are said to be planning to invest €3.22B in battery manufacturing sites in Europe, Africa, according to the South China Morning Post as well as company disclosures.

The report said that with €3.22B in battery manufacturing sites in Europe, Africa, the joint ventures will create a manufacturing infrastructure with 37.5 gigawatt-hours – GWh of yearly capacity of lithium-ion batteries and 100,000 metric tonnes of cathode materials in Spain, Slovakia, and Morocco.

The biggest project is the conversion of the Valencia, Spain gigafactory, run by VW subsidiary PowerCo, into a European LFP production center with a yearly capacity of 29.1 GWh and an overall investment of €2.26B.

Under the joint venture agreement, Gotion will take a 49% stake in the Valencia plant with an investment of some €1.1B, leaving PowerCo with 51%. PowerCo will invest approximately €470 million until 2030 to purchase 49% stakes in Gotion’s Šurany facility in Slovakia for EV and ESS battery cells and the Kenitra facility in Morocco for cathode active materials.

Battery cells manufactured at the European sites will be used predominantly for the vehicle lineup from Volkswagen. Gotion will co-develop the core cell production hubs on the continent.

The signings are in line with Gotion’s overseas expansion plan to strengthen its position when it comes to the global EV battery market and expand its long-term alliance with Volkswagen, the company said.

Separately, Volkswagen Group said its subsidiary, Volkswagen – China Investment Co., Ltd., would sell a 5.3% equity stake in Gotion.