Spain Emerges As A Fast-Growing EV Manufacturing Hub in Europe

Spain is no longer a peripheral player in Europe's electric vehicle story. With multi-billion-euro gigafactory projects breaking ground in Zaragoza, Valencia, and Martorell, and Stellantis, Volkswagen, and CATL all committing to Spanish production lines, the country is positioning itself as one of the continent's most important EV manufacturing hubs.

 

For Tier-1 suppliers serving the European auto market, the shift matters. Spain is moving from a final-assembly destination for combustion vehicles into a full-stack EV ecosystem covering cells, modules, packs, and complete vehicle platforms. The question is no longer whether Spain will become a major EV hub, but how fast the supply chain around it will need to scale.

 

This article looks at the investments, policy support, OEM commitments, and supply chain signals that are reshaping Spain's role in Europe's EV industry, and what it means for the component suppliers building the parts that go into every electric vehicle.

 

Related Reading: Indonesia EV Manufacturing Hub: ASEAN's Next Auto Cluster Is Here

 

 

 

Spain has attracted more than €12 billion in announced EV and battery manufacturing investments since 2023, backed by a coordinated mix of EU and national funding.

 

Key headline figures:

• CATL–Stellantis Zaragoza gigafactory: €4.1 billion joint venture, 50 GWh annual capacity target, 4,000+ direct jobs, construction started November 2025, production targeted for end of 2026, full ramp by 2028.
• PowerCo Sagunto (Valencia): Volkswagen Group battery subsidiary, 20 GWh initial capacity across two production lines, first cells scheduled for September 2026, full series production from July 2027, up to 3,000 direct and 30,000 indirect jobs.
• SEAT–Cupra Martorell battery assembly plant: €300 million investment, opened December 2025, supplies battery systems for the VW ID. Polo, Cupra Raval, and the wider VW Group compact EV family.
• PERTE VEC IV funding round: €1.25 billion allocated in mid-2025, the fourth call of Spain's strategic EV and connected vehicle programme, fully managed by SEPIDES.

 

Together, these projects make Spain the only European country outside Germany with three confirmed gigawatt-scale cell plants, and the only country with new OEM entry-level EV production dedicated to the European market launching in 2026.

 

 

Three automaker groups are driving Spain's EV transition, each with a different strategic role.

 

• Stellantis is the anchor. Its Figueruelas site near Zaragoza will host the CATL joint venture and continue to produce key electrified nameplates. The site ties battery production directly to vehicle assembly, allowing Stellantis to localise its European LFP supply chain and reduce dependence on Asian imports.
• Volkswagen Group, through its SEAT and Cupra brands, is positioning Spain as the manufacturing home for its entry-level EV platform. The four confirmed models, the Cupra UrbanRebel/Raval, the VW ID. Polo, ID.2X, and a Skoda SUV, will all be built at Martorell and Pamplona, with battery systems supplied by the new Martorell assembly plant and cells from PowerCo Sagunto.
• Renault, Hyundai, and Chinese entrants round out the picture. Renault continues to operate in Valladolid and Palencia, while several Chinese OEMs have opened sales operations and are evaluating local production partnerships. BYD, in particular, has publicly confirmed that Spain is on its shortlist for a European manufacturing footprint.

 

This concentration of OEM activity is unusual for a single European country and gives Spain a structural advantage: the supply chain density that typically takes a decade to build is being assembled in three to five years.

 

 

Spanish government policy has been a critical enabler. The PERTE VEC programme, the Strategic Project for Economic Recovery and Transformation of the Electric and Connected Vehicle, has now moved into its fourth call, with €1.25 billion deployed in 2025 alone. Across its full lifecycle, PERTE VEC is expected to mobilise more than €24 billion in combined public and private investment.

 

What makes the Spanish approach distinctive is its focus on the full value chain. PERTE VEC funding covers not only cell and pack manufacturing, but also:

• Component and systems suppliers (including Tier-1s and Tier-2s)
• Charging infrastructure and grid integration
• Battery recycling and second-life applications
• Connected vehicle and autonomous driving R&D

 

For international automotive component suppliers, the message is clear: Spain is not just subsidising gigafactories. It is underwriting the broader industrial base that those gigafactories need. Companies that localise early, through joint ventures, technology partnerships, or direct manufacturing, are positioned to capture both direct OEM contracts and the multiplier effect from Spanish Tier-1s expanding to serve them.

 

 

The build-out is creating demand for a wide range of automotive components and engineering services. The most active categories include:

• Battery housing and structural components, including stamped, welded, and coated steel and aluminium enclosures for cells, modules, and packs.
• Cooling and thermal management systems, liquid cooling plates, hoses, manifolds, and integrated thermal modules for high-capacity LFP and NMC packs.
• Precision tubing and fluid handling, brake lines, fuel system components, hydraulic tubing, and EV-specific cooling circuits, all of which require high-grade welded steel, stainless, and aluminium tubing.
• Chassis and structural parts, cross members, reinforcement panels, and roll-formed profiles adapted to EV skateboard platforms.
• Welding, forming, and surface treatment services, including laser welding, MIG/MAG, resistance welding, and anti-corrosion coatings that meet European OEM specifications.

 

This is where Spain's traditional strengths as a tier-1 manufacturing economy become a strategic asset. The country already has deep expertise in metal forming, welding, stamping, and surface treatment, capabilities that map directly onto the requirements of EV battery and chassis production.

 

 

Three practical implications for component suppliers evaluating Spain as part of their European footprint:

1. Localisation is no longer optional. OEM RFQs in 2026 increasingly require local content and short supply chains. Suppliers without a Spanish or Iberian manufacturing presence will be filtered out of new platform sourcing.
2. The window for early positioning is closing. The first wave of gigafactory supplier onboarding is happening now. By 2027, the major battery enclosure, cooling system, and structural component contracts will be largely awarded. Suppliers entering the conversation in 2028 will be working from a smaller pool of available business.
3. Quality standards are converging with Northern European OEMs. Spanish production is no longer a lower-spec alternative. SEAT-Cupra, Stellantis, and VW Group platforms in Spain are built to the same IATF 16949, PPAP, and APQP standards as German and French sites. Suppliers already certified to these standards can integrate directly.

 

For suppliers with proven capabilities in metal forming, welding, tubing, and battery-related structural components, Spain represents one of the most concentrated EV manufacturing build-outs currently underway in Europe.

 

 

The next 18 to 24 months are decisive. By the end of 2026, PowerCo Sagunto is expected to produce its first cells, CATL–Stellantis Zaragoza is targeted to begin LFP battery production, and the first VW Group entry-level EVs will roll off the Martorell line. By mid-2027, PowerCo's full series production begins, and the broader supplier ecosystem around these anchor plants will be largely established.

 

The risks are real. Energy costs, grid capacity, raw material price volatility, and EU–China trade frictions all create uncertainty. But the directional signal is unambiguous: Spain is building one of the most integrated EV manufacturing ecosystems in Europe, and the supply chain around it is being assembled right now.

 

For OEM buyers, sourcing teams, and component manufacturers tracking Europe's EV transition, Spain is no longer a market to watch. It is a market to be in.