Stellantis and the Chinese battery manufacturer CATL They will invest 4.1 billion euros (about 4.33 billion dollars) in a battery factory for electric vehicles in Zaragoza, in northern Spain, they announced this Tuesday in a statement.
Both companies have created a 50:50 joint venture for the project and hope to start production at the end of 2026. The factory could reach a capacity of 50 gigawatt hours, depending on the evolution of the electric vehicle market in the region and the support of the authorities, the two companies said in a statement.
Europe has been trying to attract electric vehicle battery makers to build factories in the region — where they are located car manufacturers such as Volkswagen and Stellantis— as it tries to reduce its dependence on Asia and beat the United States in a race to subsidize green projects.
The decision to grant the factory to Spain comes after the country refrained from imposing additional tariffs on Chinese imports of electric vehicles to the European Union and after the Spanish president, Pedro Sanchezwill urge the EU to reconsider the penalty for electric cars made in China to avoid a trade war.
Chinese companies have to seek approval from Beijing to make direct investments abroad, and China has privately told automakers to stop large investments in European countries that support imposing additional tariffs, Reuters reported in October.
Spain announced in 2020 a 5 billion euro plan to attract the production of electric vehicles and batteries with EU funds intended to alleviate the pandemic.
Stellantis has received about 300 million euros from that plan, according to the Spanish Government.
Low demand for electric vehicles
Elsewhere in the EU, plans have faced bureaucratic hurdles, production problems and slower-than-expected demand for electric vehicles.
Last month, the Swedish Northvolt filed for Chapter 11 of the United States Bankruptcy Law after the loss of a major client and lack of financing. The CATL-Stellantis company would bring “innovative battery production to a manufacturing center that is already a leader in clean and renewable energy,” said Stellantis president John Elkann.
Robin Zeng, president and CEO of CATL, was in Madrid on Monday, where he met with the President of the Government, Pedro Sánchez.
The project is a key piece of Stellantis’ objective of boosting the production of electric vehicles at its plants in Aragon and Galicia.
Spain is the second European automobile producer and Stellantis’ investments are essential to maintain its position.
The Zaragoza plant would be CATL’s third factory in Europe; the other two are 100% owned by the battery manufacturer.
CATL has had a factory in Germany for six years, the first in Europe, with a total investment of 1.8 billion euros to reach a final production capacity of 14 gigawatt hours.
It is building a new plant in Hungary with an investment of 7.3 billion euros and a planned capacity of 100 GWh. Stellantis is also the largest investor in the ACC battery manufacturing joint venture, along with mercedes and the French oil company TotalEnergies.
ACC has started production at a gigafactory in France, while development of two other gigafactories, in Italy and Germany, has been halted due to low demand for electric vehicles.
