CATL, a leading Chinese battery manufacturer, and Stellantis, the Franch-Italy Automotive Group, announced on December 10th that they will each hold a 50% stake in a joint venture to invest €4.1 billion in constructing a large-scale lithium iron phosphate (LFP) battery plant in Zaragoza, Spain.
The plant, which is situated near Stellantis' automotive manufacturing facilities in Spain, is scheduled to begin production by the end of 2026 with a planned annual capacity of up to 50 GWh. The scale of the expansion will depend on the development of the European electric vehicle market and continued support from the Spanish government and the European Union. The factory is designed to meet full carbon-neutral standards, and the investment plan is progressing steadily.
In addition to its battery joint venture with Mercedes-Benz and TotalEnergies, Automotive Cells Company (ACC), Stellantis has been seeking additional EV battery support. It has been speculated in the past year that Stellantis has been looking for locations to build new battery plants beyond the ACC sites in Douvrin (France), Kaiserslautern (Germany) and Termoli (Italy). Spain has long been considered a likely candidate for a new battery plant location due to Stellantis' operation of three vehicle plants in Madrid, Vigo, and Zaragoza, and its announcement to produce small electric vehicles based on the STLA Small platform in Spain.
The progress of ACC's battery plants in France, Germany, and Italy has not been smooth, with the German and Italian projects still in early stages and currently suspended, reportedly due to a shift in plans from NMC (nickel-manganese-cobalt) batteries to more cost-effective LFP battery technology. To date, several European and American automotive companies, including Renault, Ford, and General Motors, have announced their intention to adopt LFP batteries to reduce costs.
The establishment of this battery joint venture with CATL in Spain will significantly enhance Stellantis Group's advantage in the European LFP battery market, aiding the automaker in providing higher quality, more durable and more affordable electric sedans, crossovers, and SUVs in the B and C segments.
Stellantis Group and CATL signed a non-binding memorandum of understanding (MoU) in November 2023, aiming to serve Stellantis' electric vehicle manufacturing in Europe by providing localized LFP cells and modules. At that time, the two parties announced a long-term collaboration on two strategic fronts: first, to create an ambitious technology roadmap to support the development of Stellantis' advanced battery electric vehicles; and second, to actively explore new cooperation opportunities to further enhance the battery value chain.
CATL currently operates two battery plants in Germany and Hungary, bringing advanced battery manufacturing technology to Europe. The newly announced Spanish battery factory will further support CATL's European customers in achieving their climate goals and accelerate the transition to electric mobility and energy transformation in Europe and the global market.
Beyond traditional LFP and NMC batteries, Stellantis has also invested in next-generation battery technologies. Recently, Stellantis invested in two American lithium-sulfur battery companies, Zeta Energy and Lyten, focusing on the development of lithium-sulfur battery technology. In the field of solid-state batteries, Stellantis, along with Mercedes-Benz and others, invested in the American solid-state battery company Factorial Inc., with plans to launch the all-new Dodge Charger Daytona electric vehicle equipped with solid-state batteries in 2026. In the sodium-ion battery sector, the company has also invested in TIamat, a French sodium-ion battery startup.
