Gotion High-Tech Co.,Ltd. (002074.SZ) has announced that the company, along with its wholly-owned subsidiaries Gotion High-Tech (HK) Limited, Gotion GmbH, and Gotion Power Africa S.A.S., intends to sign an Investment Agreement with Volkswagen AG and its wholly-owned subsidiaries PowerCo SE and PowerHoldco Lux S.A.

Under the arrangements of these agreements, three joint venture companies will be established in Valencia, Spain; Surany, Slovakia; and Kenitra, Morocco, to invest in and construct lithium battery and cathode material production bases.

The total estimated investment for the projects is approximately EUR 3.222 billion, of which Gotion's total investment amounts to approximately EUR 1.598 billion, and PowerCo's total investment amounts to approximately EUR 1.624 billion.

The announcement states that with the rapid development of the global new energy industry, in order to implement the company's global strategic layout, promote overseas business development, and further deepen its long-term strategic cooperation with Volkswagen Group, both parties aim to establish joint venture companies with the goal of co-building a localized battery supply system in Europe.

The battery capacity layout is primarily intended to meet Volkswagen's European market demand, while the cathode material capacity layout is mainly to ensure the raw material supply for the company's overseas battery bases.

This investment is a significant measure for the implementation of the company's globalization strategy, which will help the company improve its European production capacity layout, extend its reach into overseas markets, expand overseas customers, and enhance the company's international competitiveness.