Stellantis, CATL to invest in 50 GWh LFP factory in Spain

Car giant Stellantis and the world’s leading battery producer, Chinese company CATL, will invest EUR 4.1 billion ($4.3 billion) to build a large-scale European lithium iron phosphate (LFP) battery plant in Zaragoza, Spain.

Both companies have made the long-awaited investment official on Tuesday after CATL obtained the approval of the Chinese government, which was delayed due to the conflict it has with the European Union over the extra tariffs imposed on electric vehicles produced in China.

These batteries will be used in electric vehicles manufactured in Spain by Stellantis, which includes brands such as Peugeot, Citroën, Fiat, Opel, Alfa Romeo and Lancia.

“The transaction is expected to close in 2025 and is subject to customary regulatory conditions,” the two companies added.

In November 2023, Stellantis and CATL had already signed an agreement for the local supply of LFP battery cells and modules for the production of electric vehicles in Europe and established a long-term collaboration.

In October, the Ministry of Industry decided to grant EUR 133 million to Stellantis Figueruelas within the PERTE VEC III battery line. This subsidy is in addition to the EUR 14 million of the PERTE for Industrial Decarbonisation also announced in October.

In total, the Stellantis group has been awarded almost EUR 300 million, through PERTE VEC calls, for the reconversion of Figueruelas, among other projects. The gigafactory, which will be able to have a production capacity of around 50 GWh of LFP batteries, is expected to begin production in 2026.

CATL already produces batteries for Europe at its two operational plants in Germany and Hungary.