Spain will invest Euro 4.3 billion to kick-start the production of electric vehicles and batteries as part of a major national spending programme financed mostly by European Union recovery funds.
Prime Minister Pedro Sanchez said the government-run plan would include the whole production chain, giving grants to companies with the goal of building the country’s first battery plant and boosting manufacturing of electric vehicles.
“It is important for Spain to react and to anticipate this transformation in Europe’s automotive sector,” he said, adding the private sector could contribute a further 19.7 billion euros to the initiative from 2021 to 2023, according to government estimates.
After Germany, Spain is Europe’s second-largest car producer. As the industry confronts a rapid transformation to electric mobility, the country is pushing to overhaul supply chains and retool its manufacturing bases to ensure it maintains this position.
With the new investment, part of a Euro 13 billion package earmarked for sustainable mobility, Sanchez expects the sector’s contribution to economic output to reach 15% by 2030, from around 10% now.
The programme, maintains the Government, could create up to 140,000 new jobs and boost the national economy.
It aims for the number of new electric vehicles registered to reach 250,000 in 2023, a big jump from the 18,000 registered in 2020, thanks to government-sponsored initiatives to buy low emission cars and expand charging stations.
As one of the main beneficiaries of the Euro 750 billion EU recovery scheme, Spain will get around Euro 70 billion in grants until 2026 to help revive its economy, which has been hit hard by the COVID-19 crisis.
While few private sector bidders have publicly emerged to seek a slice of the funds, Volkswagen’s Spanish brand SEAT and utility Iberdrola have formed an alliance to work on a bid.
Their involvement would fit within a wider project they are planning, covering all elements of electric vehicle production from mining to battery production to the manufacturing of a finished vehicle at SEAT’s assembly plant outside Barcelona.