China’s CATL, Stellantis to jointly construct electric vehicle battery factory

BARCELONA, Spain — Chinese electric battery giant CATL and automaker Stellantis announced Tuesday that they will construct a major battery factory in northern Spain.

The partners said the plant will be located in Zaragoza and commence producing lithium iron phosphate batteries by the complete of 2026.

The joint enterprise represents an pool of 4.1 billion euros ($4.3 billion), they said in a statement. The plant plans to be carbon neutral, apparently by making use of Spain’s ample supplies of solar, wind and water power.

The announcement comes after CATL and Stellantis agreed in November 2023 to collaborate on fabrication of batteries to assist construct electric cars in Europe.

CATL is already producing batteries at two European factories in Germany and Hungary.

The deal comes a day after Spanish Prime Minister Pedro Sánchez met with CATL Chairman Robin Zeng in Madrid. Spain produces the second most cars in the European Union after Germany.

European carmakers are struggling to keep up with their Chinese counterparts in electric cars, a key pillar of the green shift that the EU is pursuing. Its 27 member states won’t be able to produce internal combustion cars after 2035.

The EU, like the United States, is applying tariffs on electric vehicles imported from China to assist protect domestic producers and inspire Chinese carmakers to shift production to Europe and make local jobs.

CATL and other Chinese battery makers are far ahead in the critical area of producing batteries for electric vehicles. Northvolt, Europe’s great aspiration for catching up, filed for financial setback last month.

Stellantis includes the Chrysler, Citroen, Dodge, Jeep, Peugeot, Fiat, Opel and Alfa Romeo brands, among others.