Stellantis to build €4.1bn EV battery factory in Spain

Stellantis and battery maker CATL have announced a €4.1 billion plan to build a massive new battery plant in Spain.

The joint venture will create a new facility at Stellantis’s Zaragoza site to supply brands including Vauxhall, Peugeot, Citroen and Fiat with batteries for lower-cost models.

The plant is intended to be fully carbon neutral and production of batteries is scheduled to start before the end of 2026. When fully operational, the factory could reach a capacity of 50GW, although the firms said that was ‘subject to the evolution of the electrical market in Europe and continued support from authorities in Spain and the European Union’.

Stellantis chairman John Elkann said: “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.”

The new factory will produce lithium iron phosphate (LFP) batteries. These are seen as key to making EVs more affordable as they are cheaper to make than those using nickel cobalt manganese (NCM) chemistry. They are also more durable than NMC but have a lower energy density.

Stellantis said it would continue with a dual-chemistry strategy, using different types of batteries in different vehicles. The LFP batteries made in Spain are destined for hatchbacks, crossovers and SUVs in the B and C segments, with what Stellantis called ‘intermediate’ ranges. That means cars such as the Fiat Grande Panda, Vauxhall Corsa and Citroen e-C3.

Larger and longer-range models, such as the new Peugeot E-5008 and Vauxhall Grandland will use NCM batteries capable of more than 400 miles of driving per charge. Stellantis also plans to use solid state batteries in high-end models, with testing set to start in 2026.

The announcement, which sees both sides take a 50% share in the venture, strengthens a memorandum of understanding signed in 2023 to collaborate on battery production. It also boosts CATL’s presence in Europe. The Spanish plant will be its third facility, alongside sites in Germany and Hungary.

“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,” said Robin Zeng, chairman and CEO of CATL.

“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.”