China’s Contemporary Amperex Technology (CATL) is partnering with Stellantis to construct a battery factory in Spain, marking a significant step in their ambition to expand growth in Europe.

Chinese battery giant CATL and automaker Stellantis have announced a joint venture to build a lithium iron phosphate battery factory in Zaragoza, Spain. The 4.1 billion euro (4.3 billion USD) investment is expected to start producing batteries by the end of 2026. The plant aims to be carbon neutral, leveraging Spain’s renewable energy sources. This partnership comes after CATL and Stellantis agreed to collaborate on battery production in November 2023 to support the growth of electric cars in Europe. The deal is seen as a key step for European carmakers, as they struggle to keep up with Chinese competitors in the electric vehicle market. The European Union, in an effort to encourage domestic production and protect local jobs, has imposed tariffs on imported electric vehicles from China. The news comes as Northvolt, EU’s leading battery producer, filed for bankruptcy last month. Stellantis, which includes several brands such as Chrysler, Citroen, and Jeep, is expected to benefit from this partnership, while also helping to meet the EU’s goal of ending internal combustion engine production by 2035.