Can Gotion firmly hold the top position in the second echelon after taking over Volkswagen's factory in Spain?
Gotion High-Tech is pressing ahead with global expansion amid tight capital, fighting for the controlling stake of the factory in Spain.
Insight Energy learned from Reuters that Volkswagen is in in-depth negotiations with its partner Gotion High-Tech over the Sagunto battery factory in Spain, where Gotion High-Tech is likely to take a majority stake and lead the project operation.
Li Zhen, Chairman of Gotion High-Tech, has led a team to the factory for on-site inspection. The plant, which is planned to have an annual capacity of 40GWh and can be expanded to 60GWh, was announced by Volkswagen in 2022 to invest 3 billion euros in construction. It was originally scheduled to be put into production in September 2026, but was delayed to the end of the year due to supplier and construction issues.
However, a PowerCo spokesperson responded bluntly: there is no plan to give up control of the factory. Volkswagen wants to offload the factory to Gotion High-Tech but refuses to cede operating power.
Behind this seesaw battle lies the most real situation of Gotion High-Tech: The overseas business layout is expanding larger and larger, while the cash on the books is getting tighter and tighter. On the one hand, the Morocco loan has been landed, the Spain recycling project has started, and the negotiations on the Volkswagen factory are advancing; on the other hand, the asset-liability ratio is approaching 72%, and the short-term capital gap exceeds 10 billion yuan.
Gotion High-Tech is supporting an ambitious global layout with a tightly stretched financial statement.
The expansion ledger is written in every share reduction
The most direct signal of Gotion High-Tech's capital shortage comes from a share reduction in July.
Hefei Gotion sold 8.3995 million shares of Tongguan Copper Foil in the first half of the year, cashing out 829 million yuan, equivalent to one third of Gotion High-Tech's attributable net profit in 2025. However, the share price of Tongguan Copper Foil once rushed to 202.15 yuan in June, with the maximum increase of nearly 400% during the year. Gotion High-Tech sold out before waiting for the high point, which clearly shows the degree of capital tension.
On the same day, EVE Energy also issued an announcement on reducing its holdings of shares in its invested subsidiary.
This is no coincidence. Second-tier battery manufacturers are generally under pressure in the price war.
The figures in the financial report also reflect tight capital. According to the financial report, Gotion High-Tech's revenue in the first quarter was 11.708 billion yuan, hitting a new high for a single quarter, but the attributable net profit was only more than 21 million yuan, down nearly 80% year-on-year.
The net cash flow from investment activities was -4.657 billion yuan, with the net outflow expanding by 425% year-on-year. The asset-liability ratio was 71.97%, short-term borrowings were 17.987 billion yuan, non-current liabilities due within one year were 10.939 billion yuan, monetary funds on the books were 16.714 billion yuan, and the static capital gap was about 12.2 billion yuan.
The 5 billion yuan private placement plan launched in February this year is precisely to fill this gap.
Profits cannot support expansion, so companies can only rely on selling stocks and issuing private placements to sustain operations. This is not a problem unique to Gotion High-Tech, and the entire second-tier battery manufacturers are going through the same ordeal.
The ranking of the second echelon is being rearranged
The pattern of the domestic power battery market can be summarized in one sentence: the top two are stable, while the middle is chaotic.
CATL and BYD firmly occupy the top two positions. In the first half of 2026, CATL's domestic installed capacity reached 156.9GWh, with a market share of 45.6%; BYD's installed capacity was 57.4GWh, with a market share of 17%. The two together account for more than 60% of the market. But the rankings from 3rd to 10th are changing every month.
From January to May 2026, Gotion High-Tech's domestic installed capacity was 9.02GWh, with a market share of 4.9%, ranking fifth.
CALB's installed capacity was 10.17GWh, with a market share of 5.5%, ranking third. Sunwoda's installed capacity was 6.65GWh, with a market share of 3.6%, ranking seventh.
Their business scales are very close. Data from the China Automotive Battery Industry Innovation Alliance shows that from January to May, Gotion High-Tech rose to the third place in the industry with an installed capacity of 15.79GWh and a market share of 6.10%, while CALB fell to the fourth place with 15.51GWh and 5.99% market share, with a gap of only 0.28GWh between the two.
Gotion High-Tech's overtaking is not accidental. The company has long been deeply engaged in the lithium iron phosphate track, relying on the advantages of cost and large-scale manufacturing, coupled with the explosive sales of core customers such as Leapmotor and Volkswagen Anhui, the proportion of passenger car shipments continues to increase. This year, it has even entered the supply chain of Harmony Intelligent Mobility AITO M6, which has become a key increment to impact the industry ranking. This news was previously reported by Insight Energy.
In contrast, CALB has a balanced layout of ternary and lithium iron phosphate batteries, and its overseas installed capacity and energy storage business maintain high growth, but the growth of the domestic passenger car market is phasically weak, lacking the increment of best-selling models.
Sunwoda relies on customers such as Dongfeng, Li Auto and Wuling, and has deployed 60GWh production capacity in Zaozhuang.
The ranking competition of the second echelon is still ongoing. Whoever can get more high-quality orders, control the cost lower, and open up the overseas market will survive in this knockout round.
Technical reserves and overseas layout are Gotion High-Tech's real competitive chips
Gotion High-Tech dares to continue expanding under such tight capital conditions because it has several strong cards in hand.
The first card is Volkswagen. In 2020, Volkswagen invested 1.1 billion euros to become its largest shareholder. In November 2025, the Hefei factory completed the first batch of mass delivery of standard cells. It is estimated that the shipments to Volkswagen will exceed 10GWh in 2026. Volkswagen's orders and brand endorsement are Gotion High-Tech's most solid confidence.
The second card is technology. Gotion High-Tech has been deeply engaged in the field of solid-state batteries for more than 8 years. As of February 2026, it has accumulated more than 200 patent applications related to solid-state batteries, with invention patents accounting for more than 70%. In 2025, a 0.2GWh pilot line for all-solid-state batteries was completed, with 100% of core equipment made domestically. In 2026, it plans to build a 300 tons/year lithium sulfide production capacity and a 2000 tons/year solid electrolyte production capacity. The design of the 2GWh all-solid-state battery mass production line has been basically completed. The lithium iron phosphate track is Gotion High-Tech's core basic market, with obvious advantages in cost control and large-scale manufacturing.
The third card is overseas layout. The 20GWh project in Morocco has obtained a 100 million euro loan from the African Development Bank, and is expected to be put into operation in August 2026. The 950 million euro recycling and cathode material project in Valladolid, Spain, has received 138 million euros in government subsidies. The 20GWh project in Slovakia is expected to be put into operation in the first half of 2027. By the end of 2027, the total overseas production capacity is expected to reach about 40GWh. Overseas revenue accounted for 22.6% in 2025. From January to May, the installed power battery capacity worldwide (excluding China) was 7.8GWh, a year-on-year increase of 128.8%, with a 3.7% market share, ranking 7th.
The research report released by Citi in July also confirms this point. Gotion High-Tech's shipments in the first half of the year were about 65GWh, and the full-year guidance is 150GWh. The total production capacity will reach 260GWh by the end of the year. Citi gives a buy rating with a target price of 42.70 yuan.
Gotion High-Tech's expansion logic is clear: stabilize the basic market with Volkswagen's orders, secure a position in the next-generation battery track with technical reserves, and open up incremental space through overseas layout. The only problem left is where the capital comes from.
The negotiations on the Sagunto factory are still ongoing. If Gotion High-Tech can take the controlling stake, it will have a ready-made 40GWh production capacity base in the core European market, without having to build a factory from scratch. But even if the negotiation is successful, every link including the factory's construction, operation and capacity ramp-up requires massive capital investment.
The overseas layout cannot be stopped, otherwise the scale advantage will be lost; but if it continues to expand, the capital gap will only grow larger. All available tools including share reduction, private placement fundraising and overseas loans have been fully utilized.
The road Gotion High-Tech is taking is also being followed by all Chinese second-tier battery manufacturers. CATL achieved a net profit of 43.2 billion yuan in the first half of the year, and can allocate 20 billion to 40 billion yuan for share repurchase. Gotion High-Tech cannot afford such funds, it can only piece together its business territory little by little through one financing after another and one share reduction after another.
Volkswagen cannot fill the capital gap on the financial ledger. But Gotion High-Tech's Volkswagen orders, solid-state battery technology and overseas production capacity layout at least give it the qualification to stay in the competitive game. The reshuffle of the second echelon is far from over. Whether Gotion High-Tech can win in the end depends on whether it can make the overseas business operate profitably before the capital chain breaks.