How CATL's arrival in Zaragoza

Smaller electric cars will guarantee the industry’s future.

Other companies have shown interest in Spain besides Stellantis and Volkswagen.

The European automotive industry is in crisis and undergoing changes that could affect its future. Layoffs, reduced production, and new players looking to break into the market are clouds in the storm.

This storm has hit Spain before. According to INE, the automotive industry accounts for almost 8% of GDP and employs over 600,000. Vigo and Zaragoza (Stellantis), Pamplona (Volkswagen), Ford (Valencia), and Valladolid and Palencia (Renault) are especially affected by production plants. Volkswagen and Seat’s impact in Barcelona and other Spanish plants like Madrid (Stellantis) and Seville (Renault) cannot be ignored.

Our country needs to switch to electric cars because the industry is so heavy. Stellantis and Volkswagen’s gigafactory bets in Spain are a boost to an industry that fears staff reductions and new players’ efforts to produce electric cars.

Stellantis and CATL will build a battery gigafactory in Spain after months of rumors and the usual tug-of-war with the government for more aid.

The plant will have the nation’s highest production capacity. Stellantis claims it can produce 50 GWh of batteries in 2026, while Volkswagen’s Sagunto (Valencia) plant can only produce 40 GWh.

Battery supply for smaller electric cars will be the focus in both cases. Volkswagen wants to use Martorell to build its smallest electric cars, whether Seat or Cupra. Stellantis’ Aragonese gigafactory ensures a steady supply to its Figueruelas plant, which will build small electric cars.

Stellantis plans to implement STLA Small at its Zaragoza and Vigo plants. The company can easily switch from combustion to electric vehicle production on this multi-energy platform. The battery plant’s confirmation helps the industry transition to electric cars.

What will happen to Chery’s Barcelona plant (formerly Nissan) is unknown. It was proposed to avoid tariffs by the Chinese conglomerate to assemble prefabricated Omoda 5 kits in China. However, the Chinese government appears to have asked its companies to pause their European investments, delaying the plans.

A real storm
Spain must weather the automotive industry storm.

Electric cars reduce employment. Spain’s automotive industry relies on factories rather than engineering. This is a problem with industry reconversion.

In an interview with El Correo, Iñaki Andrés, territorial manager of UGT in Álava and union delegate at Mercedes, stated that “the screw-tightening system is going to disappear.” Industry warnings are coming. In the past, Seat CEO Wayne Griffiths predicted that the electric car would create 2,500 to 2,800 jobs.

Electric cars could threaten 8,000 Spanish jobs, according to Aedive (Business Association for the Development and Promotion of Electric Mobility). The same report raised the number to 29,000 workers by 2030, but it said we can keep most of them by taking the right steps.

Spanish electric car manufacturing increases the risk of job losses in the coming years. Because fewer people will work on the production lines and combustion engine cars must lose market share. Seat’s Martorell production is temporarily threatened.

However, Stellantis and Volkswagen’s investments also revitalize the industry. Europe must produce more affordable electric cars to avoid multi-million-dollar fines and meet its emissions targets.

These 20,000–25,000-euro cars should inspire fully electric technology in the coming years. Valladolid (Renault) is a leader in plug-in hybrid battery production, another technology that should grow with political restrictions next year.

All of this proves Spain’s electric car production is competitive. Morocco, Turkey, and Eastern Europe are trying to attract investment because of their cheap labor and low profit margins.

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