CATL Stellantis Spain Partnership: Boosting Spain’s Lithium-ion Battery Market

The Spain lithium-ion battery market is entering a new stage of rapid development. The Zaragoza plant of global automotive giant Stellantis is partnering with CATL, the world’s largest EV battery manufacturer, to expand electric vehicle production and build a large-scale battery manufacturing facility in Spain. The project, if finalized, will not only reshape Spain’s EV industry landscape but also strengthen the European foothold of the CATL Stellantis partnership.

1. €133 Million Government Subsidy to Boost CATL Stellantis Spain Project

On October 8, Spain’s Minister of Industry and Tourism, Jordi Hereu, announced that the government has allocated €133 million in subsidies to support Stellantis’ proposed battery manufacturing plant near Zaragoza. The project, developed in partnership with CATL, is expected to attract nearly €2.5 billion (19.3 billion yuan) in investment. Once operational, the factory will produce LFP batteries for a range of Stellantis brands, reinforcing Spain’s competitiveness in the European EV supply chain.

Although Stellantis has not yet made a final decision, the Spanish government is actively pushing forward the project, aiming to anchor Spain as a strategic leader in the Europe lithium-ion battery industry. A Stellantis spokesperson confirmed that the project remains subject to regulatory approval but welcomed the government’s support.

2. Strengthening the Spain Lithium-Ion Battery Market

If finalized, the joint venture between CATL and Stellantis in Spain will reshape the Spain lithium-ion battery market, further integrating the European EV ecosystem. For CATL, this would add another overseas plant to its growing global footprint. The company has already established major factories in Germany and Hungary, with production capacities of 14 GWh and 100 GWh respectively. The new Spain project would serve as another cornerstone in its expansion across Europe.

Back in November 2023, Stellantis and CATL announced at the same time that they had signed an agreement covering battery supply, establishment of a joint venture, and technical cooperation.

The two sides agreed that CATL will supply LFP batteries cells and modules to Stellantis Group locally in Europe to boost Stellantis’ electric vehicle production in the European market. It is reported that CATL’s LFP batteries will cover Stellantis Group’s sedans, crossovers and SUVs in the B to C class range.

To further support Stellantis’ ambitious electrification goals in its “Dare Forward 2030” strategic plan, the two companies are exploring the possibility of establishing a joint venture on a reciprocal basis.

In Jordi Hereu’s view, the Spanish automotive industry is in a critical period of transformation, China is “crucial” for Spain to accelerate the development process of the electric vehicle industry.

3. Job Creation and Local Economic Growth

The CATL Stellantis Spain battery factory is expected to create around 3,000 jobs, boosting the local economy and furthering Zaragoza’s role as a hub for EV innovation. In addition to the battery plant, Stellantis will also develop the STLA Small EV platform at the Zaragoza site, where future small and compact EVs will be manufactured.

For local communities—and especially for Chinese students and professionals in Zaragoza—this project represents a bridge for China-Europe cooperation in the automotive supply chain, opening up new opportunities for collaboration and employment.

4. LFP Route is Popular Overseas

The LFP batteries technology route is becoming more and more popular overseas. Including the Stellantis Group, which received subsidies from Spain this time, Tesla, Daimler, Ford, Rivian and many other international mainstream car companies are increasingly favoring the lithium iron phosphate battery route, and international car companies have successively purchased lithium iron phosphate batteries.

In July this year, it was revealed that Renault officially placed an order for 39GWh of lithium iron phosphate batteries, which were jointly provided by CATL and LG New Energy. Among them, LG New Energy signed a four-year sales contract for 160,000 tons of LFP positive electrode materials with Changzhou Lithium Source, a subsidiary of Longpan Technology.

From the perspective of domestic LFP batteries exports, ternary batteries were the absolute mainstream of power battery exports in the past. With its advantages in safety and economy, the lithium iron phosphate technology route has increased its recognition in the global market and has begun to show a momentum of eroding ternary batteries in overseas markets.

According to the data from the General Administration of Customs, China’s exports of LFP reached 765 tons in the first half of 2024, an increase of about 26% year-on-year. This growth momentum is still continuing. The latest data shows that China’s exports of lithium iron phosphate in August were 262 tons, an increase of 60% month-on-month and 194% year-on-year.

5. Conclusion: Spain’s New Role in the Global Battery Race

The CATL Stellantis Spain partnership is more than just a manufacturing project; it represents a strategic move to position Spain at the heart of Europe’s EV transformation. With substantial government backing, large-scale investment, and thousands of jobs at stake, this collaboration is set to accelerate the development of the Spain lithium-ion battery market while strengthening CATL’s global influence.

As the world moves towards electrification, projects like CATL Stellantis Spain highlight the importance of cross-border cooperation in shaping the future of the EV and battery industries.

6. Lithium Battery Testing Solutions Recommend：IEST Instrument

IEST is a high-tech enterprise focusing on R&D and production of lithium ion battery tester. IEST is a professional manufacturer that integrating laboratory instrument R&D and production, method development, instrument sales and technical services. Committed to providing leading testing solutions and services for the global new energy field, IEST company serves key clients like CATL, BYD, Huawei, Svolt, GM, Leyden, Sintef, Factorial, Cabot, Cuberg.