Spain to invest €24 billion in strategic project to boost e-mobility

14 July 2021

The Spanish government has presented a Strategic Project for the Recovery and Economic Transformation (PERTE) of electric and connected vehicles. A total investment of more than €24 billion is earmarked by the end of 2023, with a public-sector contribution of €4.3 billion and private investment of €19.7 billion.

The president, Pedro Sánchez, identified the PERTE as one of the main industrial transformation projects in Spain and Europe in recent decades, which serves as an example of the government’s goals to boost the ailing Spanish economy in the wake of COVID-19.

‘Our priority is economic, social and territorial recovery. And to achieve a vigorous recovery, we cannot be satisfied with returning to the point prior to COVID, but we must transform our economy,’ Sanchez explained. ‘This revolution that we are presenting today is structured around two axes of the recovery, transformation and resilience plan: the so-called green and digital “twin revolutions”, which are key to accelerating progress towards a better Spain. We are talking about a new mobility model for a new country model after the pandemic,’ the president added.

Development and manufacturing support

The PERTE aims to create the necessary ecosystem in Spain to develop and manufacture electric and grid-connected vehicles and turn the country into a European hub for electromobility. To promote the project, the president announced the creation of an alliance for electric and connected vehicles, which ‘will involve all relevant stakeholders and ensure permanent dialogue.’

The PERTE will comprise two complementary areas of support:

• Transformative measures to boost the electric and connected-vehicle value chain, focused on the core segments of the industrial-value chain that guarantee the manufacture of these vehicles.
• Enabling measures, which contribute to both the creation of new mobility and the development of electric vehicles.

The transformative measures include a sustainable automotive-technology plan, a programme of sectoral data spaces and a programme to integrate artificial intelligence into production processes.

In terms of enabling measures, these include the Moves III incentive scheme, the individual Moves plans, the climate-change law, the regulation of electric-vehicle charging services, the 5G roadmap and its rollout, and a professional training plan.

GDP contribution and job creation

Spain is the second-largest vehicle manufacturer in Europe and the ninth-largest in the world. The automotive sector represents 11% of total industrial turnover in the country, is the fourth-largest export sector, and accounts for 15% of total exports. The job creation generated by the PERTE could reach 140,000 jobs, and the contribution to GDP would be between 1% and 1.7%.

‘With this investment to boost electric vehicles, we believe that the sector can increase its weight in GDP by up to 15% by 2030,’ said the head of the executive.

The president added that the project will contribute to the creation and consolidation of quality jobs, as all projects approved will contain a training component to ensure the qualification and re-qualification of workers. In addition, hundreds of thousands of young people will be trained through new professional training programmes aimed at this sector, as well as through the digital-skills programmes, which will be financed with European funds.

‘In this area, I would like to point out that Spain is the first country in which an Academy for Batteries is to be set up. This initiative will enable the training of some 150,000 people in the coming years in the different areas related to the development and manufacture of batteries for electric cars,’ Sanchez explained.

Other expected impacts would be to reach 250,000 registered EVs and between 80,000 and 110,000 charging points deployed by 2023.

Second-lowest BEV share in Western Europe

As more battery-electric vehicles (BEVs) have become available, and development of the technology continues, the number sold across Western Europe in the first quarter of 2021 increased by 55.6% compared to the same three months of 2020. This equates to a total of 198,930 units, according to figures released by the European Automobile Manufacturers’ Association (ACEA). The period corresponds to a time largely prior to the COVID-19 impact on new-car registrations.

This growth was spurred by big gains in key markets, most notably in Germany (149%) and Italy (145.6%). In stark contrast, demand for BEVs declined 12.6% year on year in Spain in Q1. Moreover, their market share in the country was just 1.9%, compared to 7.1% for Western Europe as a whole. This is the second-lowest share of all the region’s markets, ahead of only Greece, at 1.8%.

VW and SEAT collaboration

As announced with the presentation of their ‘New Auto’ strategy, Volkswagen (VW) Group and Spanish subsidiary brand SEAT ‘are willing to cooperate with the Spanish government to transform the country into a leading e-mobility hub, and will apply to take part in the PERTE.’

The carmaker has confirmed the possibility of a gigafactory in the country, together with a strategic partner. In its final expansion stage at the end of the decade, the plant is intended to have a yearly capacity of 40 GWh.

‘Spain could become a strategic pillar of our electric strategy. We are willing to establish the entire value chain of e-mobility in the country – electric-vehicle production, electric-car components, a new cell factory. Depending on the general framework and public support, from 2025 onwards the small BEV family could be made in Spain,’ commented Herbert Diess, CEO of Volkswagen Group.

At its 2021 annual press conference, SEAT presented its ‘Future: Fast Forward’ plan, which is intended to lead the electrification of the automotive industry in Spain, including the conversion of the brand’s Martorell plant to a dedicated production facility for electric vehicles.

‘We support and will apply to take part in the PERTE announced by the Spanish government. Realising the potential of the Future: Fast Forward project demands both public support and investment. We aim to cooperate with the Spanish government to transform the country into a European e-mobility hub and the SEAT S.A. production plant in Martorell into an all-electric vehicle factory. The Iberian Peninsula is key to achieving climate-neutral mobility in Europe by 2050. We are ready to transform the Spanish auto industry and make a significant contribution to the decarbonisation of South-Western Europe,’ concluded Wayne Griffiths, CEO of SEAT and CUPRA.