Chinese electric battery giant CATL and automaker Stellantis have announced plans to construct a significant battery factory in northern Spain. The joint venture will see the establishment of the plant in Zaragoza, with production of lithium iron phosphate batteries set to commence by the end of 2026. The partners disclosed that the project entails an investment of 4.1 billion euros ($4.3 billion) and emphasized their commitment to ensuring the plant's carbon neutrality, leveraging Spain's abundant renewable energy sources such as solar, wind, and water power.
This development follows the collaboration agreement reached between CATL and Stellantis in November 2023 to work together on battery production for electric vehicles in Europe. CATL, which already operates battery manufacturing facilities in Germany and Hungary, is a key player in the global electric vehicle battery market.
The decision to establish the battery factory in Spain was solidified after a meeting between Spanish Prime Minister Pedro Sánchez and CATL Chairman Robin Zeng in Madrid. Spain, being the second-largest automobile producer in the European Union after Germany, is strategically positioned to support the growth of electric vehicle manufacturing within the region.
European automakers are facing challenges in keeping pace with their Chinese counterparts in the electric vehicle segment, which is a crucial component of the EU's green transition agenda. With the EU aiming to phase out internal combustion engine vehicles by 2035, the focus on electric vehicle production has intensified.
To protect domestic manufacturers and incentivize Chinese automakers to establish production facilities in Europe, the EU, along with the United States, has imposed tariffs on electric vehicles imported from China. This move aims to foster the creation of local jobs and bolster the competitiveness of European electric vehicle manufacturers.
While European battery producers like Northvolt have faced setbacks, with Northvolt recently filing for bankruptcy, Chinese battery manufacturers like CATL remain leaders in the electric vehicle battery sector. Stellantis, a multinational automotive corporation encompassing renowned brands such as Chrysler, Citroen, Dodge, Jeep, Peugeot, Fiat, Opel, and Alfa Romeo, is poised to benefit from the collaboration with CATL in advancing electric vehicle technology and production.
