CATL And Stellantis Jointly Build European Battery Factory In Spain

The Zaragoza plant of globally recognized automotive manufacturing giant Stellantis is partnering with CATL, the world’s largest manufacturer of electric vehicle batteries, to expand its automotive battery plant and electric vehicle production platform in Zaragoza.

On October 8, Spain’s Industry and Tourism Minister Jordi Hereu said that the Spanish government has provided €133 million in subsidies to Stellantis to support the company’s proposed battery manufacturing plant near Zaragoza.

The battery plant, which is planned to be built in cooperation with CATL, is expected to require an investment of nearly 2.5 billion euros (19.332 billion yuan), and the LFP batteries produced will be used in electric vehicles under several brands of the Stellantis group, according to the report.

However, Stellantis has yet to decide whether to build a battery plant in Zaragoza, and the Spanish government is hoping to provide subsidies to convince the company to finalize the battery plant project, thus consolidating Spain’s position as a major automotive hub in Europe.

A Stellantis spokeswoman said the company welcomed the (Spanish) government’s decision, but that the project was still “subject to the completion of all regulatory approvals” and that an announcement would be made “in due course”.

If the joint venture plant is finalized, then CATL will have added a new overseas battery factory and Stellantis’ plans to build six battery super plants around the world will each come to a head.

CATL has laid out a battery factory in Germany and Hungary. The German factory has realized the electric core production in December last year, the capacity of the factory is 14 GWh; Hungary factory investment of 7.34 billion euros, capacity of 100GWh, a phase of the construction has begun, is expected to complete the construction in about 2 years.

1. Over $10 Billion Battery Factory Coming Soon

Back in November 2023, Stellantis Group 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.

2. The Project Will Bring A Large Number Of Jobs

Stellantis previously said the project with CATL is expected to create about 3,000 jobs and require an investment of nearly 2.5 billion euros.

In addition to the battery plant, Stellantis will also build the STLA Small EV production platform in Zaragoza, on which all future small and compact EVs will be produced. This investment will not only make Zaragoza a European leader in electric vehicles, but will also create a large number of local jobs.

For the majority of Chinese students in Zaragoza, the project between Zaragoza and CATL will lead to the cooperation of the entire Chinese-European automotive industry chain and create more opportunities for local employment in Zaragoza.

3. 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.

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