Efforts to localize battery production intensify in the race to make electric vehicles more accessible. Stellantis and Chinese battery leader Contemporary Amperex Technology Co., Ltd. (CATL) are investing up to $4.33 billion to establish a low-cost electric vehicle (EV) battery plant in Zaragoza, northeastern Spain. The facility will produce lithium iron phosphate (LFP) batteries, a cost-effective and safer alternative to traditional nickel, cobalt, and manganese-based options. By prioritizing affordability, this partnership aims to drive greater accessibility for electric cars across Europe.
Focus on Cost-Effective LFP Batteries
The Zaragoza facility will concentrate on manufacturing LFP batteries, which are gaining momentum due to their lower production costs and enhanced safety features. While these batteries offer a reduced driving range compared to alternatives, they provide a viable solution for automakers aiming to offer competitive EV pricing.
With a production capacity of up to 50 gigawatt-hours, the plant is scheduled to start delivering battery cells and modules by the end of 2026. This initiative supports Stellantis’s decarbonization strategy and aligns with the growing trend among global automakers to localize battery production, minimizing reliance on expensive metals and overseas supplies.
Strengthening European Supply Chains
The move marks another significant step in reducing dependence on Chinese battery imports while fortifying European supply chains. Stellantis Chairman John Elkann highlighted the company’s commitment to advanced battery technologies, enabling the production of competitive EVs.
This collaboration mirrors other global investments in LFP technology. For instance, Ford recently announced a $3.5 billion investment in an LFP facility in Michigan, with production targets of 2 million EVs annually by 2026. Stellantis and CATL’s joint venture underscores a broader shift in the industry, focusing on cost reduction, sustainability, and accelerating EV adoption in Europe.
