The companies have established a joint venture, splitting ownership equally, and anticipate initiating production by the end of 2026. According to their statement, the factory’s output might achieve 50 gigawatt-hours, contingent on the growth of the electric vehicle market in the area and government support.
Stellantis and Chinese battery manufacturer CATL announced a joint investment of 4.1 billion euros (USD 4.33 billion) to establish an electric vehicle battery factory in Zaragoza, northern Spain. The announcement was made on Tuesday, revealing that the partners have formed a 50-50 joint venture for this initiative, with production expected to commence by the end of 2026. They anticipate that the factory’s capacity could reach up to 50-gigawatt hours, subject to the growth of the EV market in the region and the level of support from government authorities.
This development is part of Europe’s broader strategy to reduce its dependence on Asian battery suppliers and compete for green subsidies with the United States amidst a growing push to establish local manufacturing capabilities in regions home to major automakers such as Volkswagen and Stellantis. However, such plans have encountered challenges, including bureaucratic delays, production issues, and slower-than-anticipated demand for electric vehicles.
In a related context, last month saw Sweden’s Northvolt, once hailed as a European battery leader, filing for Chapter 11 bankruptcy protection in the U.S. following the loss of a key customer and funding shortfalls.
The collaboration between CATL and Stellantis aims to introduce innovative battery production technologies to Zaragoza, a site already renowned for its commitment to clean and renewable energy, according to Stellantis’s chairman John Elkann. CATL’s chairman and CEO, Robin Zeng, further solidified these plans during a visit to Madrid on Monday, where he met with Spanish Prime Minister Pedro Sanchez.
The Zaragoza facility will be CATL’s third European factory, adding to its existing operations which include a six-year-old factory in Germany with a capacity of 14 gigawatt hours following an investment of 1.8 billion euros, and a new plant under construction in Hungary, projected to have a capacity of 100 GWh with an investment of 7.3 billion euros.
Simultaneously, Stellantis remains deeply invested in the ACC battery manufacturing joint venture, alongside Mercedes and French oil company TotalEnergies. ACC has recently commenced operations at a gigafactory in France, though the progress of additional gigafactories in Italy and Germany has been hindered by the tepid demand for electric vehicles.
