Car giant Stellantis and Chinese electric battery manufacturer CATL announced on Tuesday that they are going to build a major battery factory in Zaragoza, in northern Spain.
In a joint statement, they said the plant will start producing lithium iron phosphate (LFP) batteries by the end of 2026. LFP batteries are cheaper to produce but less powerful compared with nickel manganese cobalt (NMC) ones, the other current mainstream technology.
The companies said that the joint venture will represent an investment of some €4.1 billion.
The plant plans to be carbon neutral, apparently by making use of Spain’s ample supplies of solar, wind and water power. The companies said the factory would enable Stellantis ‘to offer more high-quality, durable and affordable battery-electric passenger cars, crossovers and SUVs’.
The announcement comes after CATL and Stellantis agreed in November 2023 to collaborate on the fabrication of batteries to help build electric cars in Europe.
It ‘could reach up to 50 GWh capacity, subject to the evolution of the electrical market in Europe and continued support from authorities in Spain and the European Union’, the companies said in the statement.
CATL, which has received robust financial support from Beijing, has launched two other European factories, in Germany and Hungary.
Its chief executive Robin Zeng met late on Monday with Spain’s Prime Minister Pedro Sánchez, ahead of the announcement of the billion-euro deal.
Zeng said CATL’s goal was ‘to make zero-carbon technology accessible across the globe’.
In a message on X (Twitter), the socialist (PSOE) premier Sánchez thanked the presidents of the two firms for their ‘firm commitment’ to Spain, adding he was ‘very pleased’.
Stellantis chairman John Elkann said in the statement that the venture ‘will bring innovative battery production to a manufacturing site that is already a leader in clean and renewable energy’.
European carmakers are struggling to keep up with their Chinese counterparts in electric cars, a key pillar of the green transition that the European Union is pursuing. The bloc’s 27 member states won’t be able to produce internal combustion cars after 2035.
The EU, like the United States, is applying tariffs on electric vehicles imported from China to help protect domestic producers and encourage Chinese carmakers to move production to Europe and create local jobs.
During a visit to China in September, Sánchez urged the European Union to ‘reconsider’ a plan to impose tariffs on Chinese electric cars, calling for a ‘compromise’ between the economic powerhouses.
Spanish Economy Minister Carlos Cuerpo called the announcement on Tuesday ‘excellent news for industry and employment in our country’.
Spain has been playing a growing role in European vehicle production, assembling 1.87 million cars in 2023 – the second-biggest producer in the continent after Germany, according to the European Automobile Manufacturers’ Association.
Founded in 2011 in Ningde, eastern China, CATL produces more than a third of the electric vehicle batteries sold in the world.
Italian-US-French company Stellantis produces 14 brands including Fiat, Peugeot-Citroen, Opel, Maserati, Chrysler, Ram and Jeep.
The Zaragoza factory deal is expected to be closed in 2025, subject to regulation.
We’re excited to announce the establishment of our third factory in Europe! 🌍 CATL and #Stellantis will build a large-scale LFP battery plant in Zaragoza, Spain. This collaboration strengthens our shared commitment to advancing clean energy solutions and driving the transition… https://t.co/U6A7bozl0E
— CATL (@catl_official) December 10, 2024
Me he reunido con Robin Zeng, presidente y CEO de @catl_official, empresa que desarrolla y fabrica baterías para vehículos electrificados.
Ambos coincidimos en la necesidad de avanzar en la descarbonización de nuestras economías.
CATL celebra la apuesta decidida del Gobierno… pic.twitter.com/Ye6ADO1iBd
— Pedro Sánchez (@sanchezcastejon) December 9, 2024
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