Despide its trouble period, Stellantis has announced a joint venture with China’s battery giant CATL.
The partnership will see an investment of up to €4.1 billion to build a large-scale LFP battery plant in Zaragoza, Spain.
A Gigafactory with ambitious goals
The new gigafactory, to be built at Stellantis’ Zaragoza site, is projected to have a production capacity of 50 GWh upon reaching full operation. Production is scheduled to begin by late 2026, marking a strategic effort by Stellantis to secure its own battery supply while also benefiting CATL’s growing presence in Europe.
This is a win-win for both parties. For Stellantis, producing batteries in-house aligns with its Dare Forward 2030 strategy to lower costs and increase supply chain efficiency. For CATL, the Zaragoza plant adds to its European footprint, which already includes facilities in Hungary and Germany. There’s also speculation about CATL potentially acquiring Northvolt—rumors the company has thus far denied.
This development follows Stellantis’ earlier plans to establish another battery production facility in Termoli, Italy. Expected to be confirmed in early 2025, the Termoli gigafactory would further expand the automaker’s EV ecosystem, solidifying its commitment to increasing localized battery production.
The collaboration between Stellantis and CATL is not new. In November 2023, the two companies signed a Memorandum of Understanding to develop a roadmap for LFP batteries and reinforce the value chain for EV production in Europe. This latest venture cements that partnership into a long-term strategic collaboration.
Why LFP Batteries Matter
The choice to focus on LFPtechnology reflects Stellantis’ goal to produce more affordable and safer EVs. LFP batteries are less expensive and inherently safer than NMC (Nickel Manganese Cobalt) batteries, making them a practical choice for mass-market vehicles. By manufacturing these batteries in Europe, Stellantis aims to reduce costs further and comply with regional sustainability goals.
Despite these advances, Stellantis faces challenges. The company’s Dare Forward 2030 strategy may be subject to revision, especially following the departure of CEO Carlos Tavares and underwhelming recent performance metrics. The Zaragoza gigafactory offers a chance to realign its EV ambitions and strengthen its market position, but success is far from guaranteed in the competitive and rapidly evolving EV sector.
For CATL, the partnership highlights China’s continued influence on Europe’s EV supply chain, despite calls for European battery independence. With a diversified and expanding presence, CATL is cementing its role as a key player in the European EV market.
