Stellantis and CATL are collaborating to establish a major electric battery manufacturing facility in Zaragoza, Spain, with an investment of 4.1 billion euros. Set to produce lithium-iron-phosphate batteries by 2026, the factory aims for an annual output of 50 gigawatt-hours. This initiative supports Europe’s electric vehicle market and underscores a commitment to sustainability. The development also highlights Spain’s growing automotive industry, which is crucial for reducing reliance on battery imports from Asia.
Stellantis and CATL Unite for a Revolutionary Battery Factory in Spain
Madrid – In an exciting development for the automotive industry, Stellantis, in collaboration with Chinese battery powerhouse CATL, has unveiled plans for a significant electric battery manufacturing facility in Spain. This ambitious project, valued at 4.1 billion euros, aims to strengthen Europe’s position in the fast-evolving electric vehicle market.
Details of the Battery Facility
The new factory will be established at Stellantis’ existing site in Zaragoza, located in northeastern Spain. This facility is set to produce lithium-iron-phosphate (LFP) batteries, with production anticipated to begin by the end of 2026. The joint venture, with equal ownership between Stellantis and CATL, aims for an impressive annual production capacity of 50 gigawatt-hours, contingent on the growth of the electric vehicle market in Europe and ongoing support from both Spanish authorities and the European Union.
Stellantis and CATL previously entered into a strategic agreement in November 2023, solidifying their long-term collaboration for local LFP supply for electric vehicles manufactured in Europe. LFP technology is celebrated for utilizing more cost-effective materials compared to the widely used nickel, manganese, cobalt (NMC) models, although LFP batteries are slightly less powerful. Stellantis already produces vehicles like the Peugeot, Opel Corsa, and Lancia Ypsilon at the Zaragoza site, which will soon introduce the ‘STLA Small’ chassis for the next generation of these models.
Both companies have emphasized that the factory is designed to be fully carbon neutral, reinforcing their commitment to sustainability.
Impact on the Automotive Landscape
This announcement raises questions about the future of Automotive Cells Company (ACC), a joint venture involving Stellantis, Mercedes-Benz, and Saft (a subsidiary of TotalEnergies). ACC is encountering challenges in launching its initial factory in northern France and has stalled plans for additional facilities in Germany and Italy, as it pivots toward low-cost battery cell chemistries.
Stellantis has clarified that the partnership with CATL complements the ACC gigafactory initiative, which has been supported since its inception in 2020. Meanwhile, ACC has secured a loan backed by its shareholders, Stellantis and Mercedes-Benz, to continue advancing its gigafactory in Billy-Berclau/Douvrin, valued at over 850 million euros. The first batteries produced are already being utilized in Peugeot 3008 vehicles, and this funding is expected to facilitate the launch of a second production line focused on Mercedes vehicles.
The roadmap for ACC is set to be finalized in the first half of 2025, bolstered by renewed shareholder backing.
Spain’s Growing Role in the Automotive Sector
The establishment of the new battery factory in Zaragoza further cements Spain’s position as a key player in the automotive industry. Last year, Spain emerged as the second-largest automotive producer in Europe, following Germany, with an impressive assembly of 1.87 million cars, according to the European Automobile Manufacturers Association.
Spanish Prime Minister Pedro Sánchez expressed enthusiasm on social media, commending the leaders of both Stellantis and CATL for their commitment to fostering a decarbonized future in Spain. Minister of Economy Carlos Cuerpo echoed these sentiments, stating that the announcement is “excellent news” for the country’s industry and employment prospects.
This development is particularly timely, given the European Union’s ongoing efforts to enhance its battery production capabilities, which are essential for the decarbonization of the automotive sector. Currently, European manufacturers heavily rely on battery imports from Asian countries, especially China.
Despite numerous multi-billion-euro projects announced in recent years across Europe, local battery production has been slow to materialize, hindered by soaring energy costs and sluggish electric vehicle sales.