A joint venture between Stellantis and the Chinese technology group CATL is driving battery cell production in Europe. Location is not Germany.
Zaragoza/Munich – The multinational car manufacturer Stellantis and CATL, a leading Chinese battery manufacturer, are joining forces to build a joint battery cell factory. What several major projects in Germany are threatening to fail or are temporarily on hold is now being implemented in Spain.
The joint venture between the two industrial giants marks a significant step for the European location in this technology area. This is largely responsible for the energy management of electric cars; China holds the highest level of competence in the age of e-mobility.
Battery cell production: Stellantis and CATL set up factory in Spain
The planned investment of 4.1 billion euros underlines the importance of the new battery cell factory, which is scheduled to start production in Zaragoza, Spain, at the end of 2026.
The technical basis of the system is formed by lithium iron phosphate cells (LFP): These batteries are known for their safety, cost efficiency and longer shelf life, although they have a lower new energy density than lithium-ion batteries.
Stellantis system allows the electricity storage units produced to be used in cars and SUVs in the B and C segments, including in the small car to compact class range.
Automotive industry locations: Spain is breathing down Germany’s neck
The announcement from Stellantis does not come as a surprise: It has long been leaked that the multinational (including Opel, Peugeot, Fiat, Chrysler, Jeep) is looking for a location for another battery cell factory outside of the Automotive Cells Company (ACC) joint venture. In November 2023, both companies signed a non-binding declaration of intent.
The greatest opportunities were created in Spain as a location, as Stellantis already had three production facilities there. The decision in favor of Zaragoza underlines the country's growing importance in European vehicle production. Last year, 1.87 million cars were built there, making Spain the second largest car producer in Europe after Germany (4.1 million according to the VDA).
Millions of Stellantis models with innovative LFP technology?
The factory in Zaragoza is expected to achieve a production capacity of up to 50 gigawatt hours (GWh) in several expansion steps. This volume can be enough to produce almost a million vehicles per year, depending on battery performance. This illustrates the enormous potential of the European-Chinese joint project.
The joint venture is held equally by Stellantis and CATL, and the deal is expected to close in 2025. “Stellantis is committed to a decarbonized future and leverages all available advanced battery technologies to offer our customers competitive electric vehicle products,” said John Elkann, Chairman of Stellantis.
New Gigafactory in Europe – CATL expects “a great success story”
However, the future capacity of the factory depends heavily on the development of the electric car market in Europe and the support from official authorities and the EU.
CATL boss Robin Zeng enthuses: “I am convinced that our state-of-the-art battery technology and excellent operational know-how, combined with Stellantis’ decades of experience in running local businesses in Zaragoza, will ensure a great success story in the industry. “”
Europe could be strengthened in terms of e-mobility
The construction of this factory would be a significant step for Stellantis and CATL and could help reduce European electromobility's dependence on battery cells from Asia and strengthen local production. By supporting innovations such as the production of LFP batteries, Spain would strengthen its position as a central player in the European e-mobility landscape.
Meanwhile, the crisis at Northvolt could hit two VW subsidiaries harder: battery cells are becoming scarce and important market launches could be delayed. (PF)
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