Spain doubles support for Volkswagen gigafactory in Valencia region

by Lorraine Williamson
Volkswagon gigafactory
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SAGUNTO – The Spanish government is doubling its aid to the Volkswagen gigafactory in Sagunto to €3.97 billion. The money will go to the Volkswagen group and SEAT for the PERTE of Electric Vehicles (VEC). 

PERTE stands for ‘Proyectos Estratégicos para la Recuperación y Transformación Económica’ (Strategic Projects for Economic Recovery and Transformation) and are a new instrument of public-private partnership in which the different governments, companies and research centres in Spain work together. 

Gigafactory

The government has allocated €3.97 billion in aid to the project presented by the Volkswagen group and Seat. This is more than double the amount allocated in the preliminary resolution published last August. On Tuesday, the government announced the final details of the support provided in connection with the PERTE VEC and that it will ultimately subsidise a total of ten initiatives out of the 13 initiatives initially presented. 

Since Ford withdrew its proposal, the consortia of companies led by Rieju and Global Gabes, associated with the Navalmoral de la Mata battery giant in Extremadura, have been left out of PERTE. Despite this, the president of Envision in Spain, José Domínguez, has informed Canal Extremadura “he is going ahead with the project”. And, furthermore, that the company will be able to pursue other public funding mechanisms in the near future. 

On Monday, Industry, Trade and Tourism Minister Reyes Maroto already announced that she would strengthen investment to meet the needs of the Volkswagen project in Sagunto. 

Support of €877 million to ten projects 

In total, the PERTE VEC will pay out support to ten projects for an amount of €877.2 million. That represents 29.5% of the total budget of €2.975 billion. Also improved is the provisional grant of €600 million, which covered about 20% of what was budgeted. 

Reyes Maroto stated that the projects funded in the first PERTE VEC call “show the great potential” Spain has to lead the way in electromobility in Europe and the government’s commitment to the transformation of the car industry to support more sustainable mobility. 

“From the ministry, we continue to work to make more public resources available to the sector to guide the important investments our business ecosystem needs to make to electrify its production chain and new global players who want to invest in our country,” she added. 

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Seat receives almost €400 million, 45% of the total 

Seat leads the final state aid allocation from PERTE VEC, receiving almost €397.4 million. This amounts to 45% of the €877.2 million distributed in this first call and more than double initially allocated. 

In second place, measured by the number of incentives, is Mercedes-Benz with its project for the comprehensive transformation of the electric mobility value chain for sustainability and competitiveness in the development and production of an electric minibus in Vitoria. €170.4 million has been reserved for this initiative, 6.9% of what was initially disbursed. 

On the other hand, the Hub-dCO2 decarbonisation project for the adaptive, modular and multi-reference production of electric cars will receive €107.8 million (2.6% more) and Tesis, led by Opel, will receive support for €52.2 million (a figure 23% higher than the preliminary). 

In addition, the government will allocate €40.06 million (+2.2%) to Renault’s initiative to create an industrial innovation ecosystem. This is for the production of electric and connected vehicles in Spain. Moreover, the project led by SAPA 32, will receive €86 million (+30%). 

The main novelty of this final list of PERTE VEC grants is the inclusion of the ARIES proposal, led by Stellantis, for the Vigo plant, with a grant of €15.19 million. 

Funds distributed before the end of the year 

The Ministry of Industry, Trade and Tourism pointed out that the winning companies will have to provide the required guarantees from now on, with the forecast that the funds will be distributed before the end of the year. 

The aim is to advance 90% of the total aid amount to each beneficiary. In addition, once the first edition of PERTE VEC is ready, the government will launch a second call. This will be “to provide continuity in the support the sector needs to tackle electrification successfully”. 

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