Hyundai Mobis to build battery plant in Spain for Volkswagen

NAVARRA, Spain -- Hyundai Mobis Co. said on Wednesday it has broken ground for an electric vehicle battery plant in Spain for stable supply to Volkswagen, after it secured a battery system assembly (BSA) order from the German carmaker last year, purportedly worth billions of dollars.

It will become the South Korean auto parts maker's first EV battery system-dedicated plant in Western Europe and is scheduled for mass production of 360,000 units annually, starting in 2026.

The unit of Hyundai Motor Group will invest around 120 million euros ($129 million) in the plant by 2030, excluding the costs of purchasing the land and building the facility. It targets average annual sales growth of 30% in Europe through 2030.

On Tuesday, it held its groundbreaking ceremony in Navarre, an autonomous community and province in northern Spain bordering France. The company said the plant will help it secure additional long-term orders from global carmakers.

The battery system assembly (BSA) combines a battery pack and a battery management system and other components to enable the safe and efficient operation of EV batteries.

The BSA produced at the plant will be supplied exclusively to Volkswagen to charge its next-generation EVs manufactured at a factory in Pamplona, Spain, 14 kilometers from the Hyundai Mobis' facility.

“The new plant in Spain means our entrance into the Western European market and will serve as a dedicated facility for Volkswagen,” Hyundai Mobis said in a statement.

"We are committed to being Volkswagen's long-term partner with stable auto component supplies and will strive to diversify our customer base in Europe," said Jung In-bo, who will head the Spanish plant of Hyundai Mobis.

The company operates battery system production lines in South Korea, Chinathe  and Czech Republic, while building new facilities in the US and Indonesia.

Jung added that the factory in Spain will play a critical role in driving the company toward electrification and increasing global orders.

The facility site spans about 150,000 square meters, or the size of 21 soccer fields. The battery plant will occupy 50,000 square meters.

Hyundai Mobis' customers include Mercedes-Benz, BMW, General Motors and China’s BYD Co, as well as its affiliates Hyundai Motor Co. and Kia Corp.

Write to Jae-Fu Kim at hu@hankyung.com
Yeonhee Kim edited this article.