European OEM Stellantis has announced a new joint venture with the world’s largest battery manufacturer CATL, to build a large-scale lithium iron phosphate (LFP) battery plant at one of the former’s existing production sites.
Today’s joint venture announcement between Stellantis and CATL builds upon a Memorandum of Understanding (MoU) signed by both companies in the fall of 2023. At the time, we reported that the MoU kicked off a broad preliminary joint venture with Chinese EV battery giant CATL that detailed the development and purchasing of LFP batteries that will power the automaker’s small and mid-sized EVs sold in Europe.
As part of the long-term deal, Stellantis – the parent company of Jeep, Fiat, Citreön, Peugeot, and others said it would erect a new gigafactory in Europe to help CATL manufacturer said LPF batteries – a chemistry that is becoming wildly popular in the EV industry as it is cheaper to manufacture and enables OEMs to pass those savings along to consumers in the form of smaller, more affordable models.
Just over a year later, Stellantis and CATL have finalized their proposed joint venture and will pool funds to build a new LFP battery plant in Spain that could reach an annual capacity of 50 GWh.
Stellantis and CATL commit up to €4.1 billion for LFP plant
Stellantis and CATL published the same press release today, confirming the joint venture agreement in which they will invest up to 4.1 billion euros to erect the LFP manufacturing facility at Stellantis’ existing production site in Zaragoza, Spain.
According to the new partners, the new LFP battery plant will be entirely carbon-neutral and erected via an investment plan in several phases. Stellantis chairman John Elkann elaborated:
Stellantis is committed to a decarbonized future, embracing all available advanced battery technologies to bring competitive electric vehicle products to our customers. 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. I want to thank all stakeholders involved in making today’s announcement a reality, including the Spanish authorities for their continued support.
The 50/50 joint venture between Stellantis and CATL aims to start LFP cell production by the end of 2026. It could reach an annual capacity of 50 GWh, “subject to the evolution of the electrical market in Europe and continued support from authorities in Spain and the European Union.”
Stellantis said its partnership with a battery leader like CATL will enable it to implement LFP battery technology in its crossover and SUV BEVs in the B and C segments, which will be durable and affordable with “intermediate ranges.” CATL chairman and CEO Robin Zheng also spoke to the JV with Stellantis:
The joint venture has taken our cooperation with Stellantis to new heights, and I believe our cutting-edge battery technology and outstanding operation knowhow combined with Stellantis’ decades-long experience in running business locally in Zaragoza will ensure a major success story in the industry. CATL’s goal is to make zero-carbon technology accessible across the globe, and we look forward to cooperating with our partners globally through more innovative cooperation models.
When production begins, the Spanish facility will be the third CATL battery plant in Europe, joining existing operations in Germany and Hungary alongside other global footprints in the works. CATL’s LFP batteries will offer Stellantis a dual-chemistry approach since it already sells BEVs with lithium-ion nickel manganese cobalt (NMC) cells. The new facility is also part of the automaker’s plans to become net zero carbon neutral by 2038.
The joint venture transaction is expected to be finalized sometime in 2025.
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