Stellantis and CATL to Build EV Battery Factory in Spain

MADRID (Reuters) – Stellantis and Chinese battery maker CATL plan to invest 4.1 billion euros ($4.33 billion) in a factory for electric vehicle batteries in Zaragoza, northern Spain.

Joint Venture Details

The 50-50 joint venture is expected to start production by the end of 2026 and aims to reach a capacity of 50 gigawatt hours, contingent on the evolution of the EV market and governmental support.

Attracting EV Battery Makers

Europe is actively seeking to attract EV battery manufacturers to set up factories to reduce its reliance on Asia and compete for green subsidies with the United States. Spain has avoided imposing extra tariffs on Chinese EV imports, aligning with Prime Minister Pedro Sanchez's call for reconsideration of punitive measures against Chinese-made EVs to prevent a trade war.

Investments and Renewable Power

Despite Chinese companies needing approval for foreign investments, Spain's attractiveness for battery plants is bolstered by its wind and solar power resources, which are 20-25% cheaper than in central Europe. Renewable energies account for 77% of total installed capacity in Aragon, also attracting tech giants like Microsoft and Amazon to establish data centers.

Challenges Elsewhere

Other EU plans have encountered bureaucratic issues and slow EV demand. This contrasts with the CATL-Stellantis venture, which aims to infuse innovative battery production into a leading clean energy manufacturing site.

Project Significance

This project is essential for Stellantis to enhance EV production at its facilities in Aragon and Galicia. The Zaragoza plant will be CATL's third in Europe, supplementing its operations in Germany and Hungary.

Stellantis and ACC

Stellantis is the largest investor in the ACC battery-making joint venture, which involves Mercedes and TotalEnergies. ACC has initiated production in a gigafactory in France, while developments in Italy and Germany are behind schedule due to low EV demand.

($1 = 0.9472 euros)