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The head of Seat, the only major national car manufacturer in Spain, has asked national and EU authorities to approve aid for a new battery factory of 3 to 4 billion euros in the summer or risking the future of the country’s auto industry.
Wayne Griffiths, president of Volkswagen’s subsidiary, said firm commitments were needed from Spain and the EU if Seat wanted to move forward with plans to produce a cheap electric car from 2025 at its base in Martorell, Catalonia.
“We’re all there, fighting for it, we know it’s doing or breaking: Seat needs an electric car for the future, because it’s the future,” he told the UK executive, who took office at the October. Financial Times in an interview.
“We are ready, we have an investment plan of 5 billion euros and now the pending issue is the commitment of the Spanish government… And the support of Europe for our project.”
The 55-year-old VW group veteran, who has now obtained his German passport, said the decision to set up a government-backed factory to make batteries, the key technology for the car, should be taken “this year . . . for the summer ”. He added: “We need to start developing the car now. . . There is no plan B. ”
VW is embarking on one of the most ambitious electrification programs of any vehicle manufacturer worldwide and plans to obtain parts for its new vehicles from just six battery factories in Europe.
Currently, VW and its partners are considering where one of the factories in southern Europe can be located. Portugal and France are possible alternatives in Spain. A key factor will be the amount of state aid allowed by the EU commission for this project.
Unlike traditional engines, which are often shipped worldwide to car factories, batteries have to be produced near their final assembly lines because they are very heavy to carry.
Governments across Europe, including the UK and Germany, are rushing to attract investment in battery factories as a way to safeguard their automotive plants in the coming decades.
Seat expects the electrification project to be one of the most prominent beneficiaries of the 140 billion euros that Spain expects to receive from the EU’s 750 billion euro recovery fund, as the bloc moves forward with plans to use much cleaner energy by the end of this decade.
Although Spain has the second largest car sector in the EU after Germany, it lags behind in electrification in terms of both manufacturing and sales. Only 2% of Spanish car sales were electric vehicles last year, compared to an average of 7% in Western Europe.
“It’s a vulnerability if things don’t change and a great opportunity, if we make the right decisions now,” Griffiths said of the country’s final state in electrification, as he highlighted Seat and Spain’s traditional focus on cheaper car manufacturing. Seat expects a price of its inaugural electric vehicle between 20,000 and 25,000 euros.
The company’s high-end brand, Cupra, plans to launch its first electric car later this year.
“Until now, electric cars or zero-emission vehicles came from luxury brands or Tesla, so if we want to have a real impact [on cutting carbon emissions] we need to democratize electric mobility, “Griffiths said.” If there is a market and a manufacturer capable of doing that, we are. “
He warned that otherwise, fast-moving companies in China and elsewhere could take advantage of technological change to gain large chunks of market share.
“I have been working in the car industry since I was born, my father was a car dealer; our industry has not changed so much in the last 55 years, ”he said.
“But what will happen now will take place in ten years, in 2030; this disruption will happen incredibly quickly, and industries and economies that can adapt quickly – and the Chinese are very fast – will certainly have an advantage. “.
He acknowledged that the Spanish government had met other prerequisites for the project, in particular by committing up to 800 million euros from the fund to recover subsidies for the purchase of electric vehicles and promising to spend the money to install 100,000 points of recharge nationwide in 2023.
The government is also quickly following a partnership between Seat and other Spanish blue-chip companies Iberdrola and Telefónica to receive EU recovery funds, the first such designation in the country. The collaboration seeks to supply renewable energy to the facilities of the VW group in Spain and install recharging points throughout the country.
But Griffiths stressed that the approval and location of the battery factory still had to be resolved, the overall cost of which stood at between 3 and 4 million euros.
“At the end of the day, the VW group will always take the most competitive offer,” he said. “If we are going to build electric cars, we will need batteries for these electric cars. . . and the battery must be at an affordable level. “
He said Seat understood that the Spanish government was “interested in participating [in a battery factory] as a national interest ”, and asked that the cells be assembled in batteries at Seat’s facilities in Martorell or Barcelona, and added that electric motors could also be built in one of the company’s plants .
“We need full integration to make it cost-effective, especially in this first stage, when battery costs are current,” he said. “It is essential that we, our suppliers and everyone receive support for this to happen, and that is why we ask for support from the Spanish government… For Spain to be competitive.”
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