Spain invests US$5.1 billion to support electric car and battery production

According to foreign media reports, Spain will invest 4.3 billion euros (US$5.11 billion) to support the production of electric vehicles and batteries. The plan will include 1 billion euros for improving electric vehicle charging infrastructure.

According to foreign media reports, Spain will invest 4.3 billion euros ($5.11 billion) to support the production of electric cars and batteries as part of a major national expenditure plan funded by the European Union Recovery Fund.

Spanish Prime Minister Pedro Sanchez said in a speech on July 12 that the plan is aimed at stimulating private investment and will cover the entire production chain from the extraction of lithium materials to the assembly of batteries and the manufacture of electric vehicles. Sanchez also said that the plan will include 1 billion euros for improving the charging infrastructure for electric vehicles.

“It is very important for Spain to respond to and participate in the transformation of the European automotive industry,” Sanchez added, according to government estimates that private investment may contribute another 15 billion euros to the plan.

The seat brand of the Volkswagen Group and the utility company Iberdrola have formed an alliance to jointly apply for funding to fund a broader project they are planning, covering all the elements of electric vehicle production, from mining to battery production, to SEAT manufactures complete vehicles in an assembly plant outside of Barcelona.

Spain’s plan can stimulate the creation of up to 140,000 new jobs and promote national economic growth of 1% to 1.7%. The country aims to increase the number of electric vehicle registrations to 250,000 by 2023, which is much higher than the 18,000 in 2020, thanks to the government’s support for the purchase of cleaner cars and the expansion of charging stations.

Spain is the second largest in Europe (after Germany) and the eighth largest car producer in the world. As the automotive industry faces a structural shift towards electric vehicles and greater technological integration, Spain is competing with Germany and France to overhaul the automotive supply chain and reorganize its manufacturing base.

As one of the main beneficiaries of the EU’s 750 billion euros ($908 billion) recovery plan, Spain will receive approximately 70 billion euros until 2026 to help the country’s economy recover from the epidemic. Through this new investment plan, Sanchez expects that by 2030 the contribution of the automobile industry to the country’s economic output will rise from the current 10% to 15%.