European automaker Stellantis and Chinese battery giant CATL have joined forces to build a large-scale lithium iron phosphate (LFP) battery plant in Zaragoza, Spain. The joint venture, valued at up to €4.1 billion ($4.29 billion), signifies a significant step towards electric vehicle (EV) production and battery independence in Europe.  

The state-of-the-art facility is set to commence operations by the end of 2026 and has the potential to reach a substantial 50 GWh capacity. However, the final capacity will depend on the evolution of the European electric vehicle market and continued support from Spanish and European Union authorities.

The strategic decision to utilize LFP battery technology aligns with Stellantis's vision of providing affordable electric vehicles. LFP batteries, while offering slightly lower range compared to their NMC counterparts, are renowned for their durability and cost-effectiveness, making them an ideal choice for budget-conscious consumers.

Both companies are committed to environmental sustainability. The plant is designed to operate with zero carbon emissions, perfectly complementing Stellantis's goal of achieving carbon neutrality by 2038 and CATL's target of 2035.

This collaboration is a significant win for Stellantis, as it strengthens their position in the European EV market. The plant will solidify their leadership in LFP battery technology, enabling them to offer a diverse range of affordable electric cars, crossovers, and SUVs. Moreover, Stellantis remains dedicated to a dual-chemistry approach, leveraging both LFP and NMC batteries to cater to a wide spectrum of customer needs.

CATL also benefits from this partnership. The Spanish facility, in addition to their existing operations in Germany and Hungary, expands their European footprint, empowering them to better serve European customers and contribute to their climate goals. The collaboration also fosters innovation, as both companies work together to develop cutting-edge battery technology.

This strategic alliance between Stellantis and CATL marks a pivotal moment for the automotive industry and the broader shift towards electric mobility. It underscores the growing importance of LFP batteries in the EV market and Europe's determination to establish a robust and sustainable battery supply chain.

Talking about the partnership, Stellantis Chairman John Elkann said, "This important joint venture with our partner CATL will bring innovative battery production to a manufacturing site that is already a leader in clean and renewable energy, helping drive a 360-degree sustainable approach."  

CATL Chairman and CEO Robin Zeng said, "The joint venture has taken our cooperation with Stellantis to new heights. our cutting-edge battery technology and outstanding operation knowhow combined with Stellantis’ decades-long experience. will ensure a major success story in the industry."