Stellantis (STLAM.MI) and Chinese battery maker CATL (300750.SZ) will invest 4.1 billion euros ($4.33 billion) in a factory making electric vehicle batteries in Zaragoza in northern Spain, they said on Tuesday.
The companies have set up a 50-50 joint venture for the project and expect to start production by the end of 2026. The factory's capacity could reach 50 gigawatt hours, depending on the evolution of the EV market in the region and on support from authorities, they said in a statement.
Europe has been seeking to attract EV battery makers to build factories in the region - home to carmakers such as Volkswagen and Stellantis - as it tries to cut a reliance on Asia and win a green subsidies race with the United States.
Plans, however, have faced bureaucratic hurdles, production problems and slower EV demand than expected.
Last month, Sweden's Northvolt filed for Chapter 11 bankruptcy protection in the U.S. after the loss of a major customer and lack of funding turned it from a European battery champion into a company struggling to stay afloat.
The CATL-Stellantis venture would bring "innovative battery production to a manufacturing site that is already a leader in clean and renewable energy," Stellantis's chairman John Elkann said.
Robin Zeng, CATL's chairman and CEO, visited Madrid on Monday, where he met with Prime Minister Pedro Sanchez.
The Zaragoza plant would be CATL's third factory in Europe; the other two are wholly owned by the battery maker.
CATL operates a six-year-old factory in Germany, its first in Europe, with a total investment of 1.8 billion euro to achieve an ultimate production capacity of 14 gigawatt hours.
It is building a new plant in Hungary with an investment of 7.3 billion euros and planned capacity of 100 GWh.
Meanwhile, Stellantis is also the largest investor in the ACC battery making joint-venture together with Mercedes (MBGn.DE) and French oil company ToatalEnergies (TTEF.PA).
ACC has started production at a gigafactory in France, while the development of two other gigafactories, in Italy and Germany, has been stalled due to low demand for electric vehicles.
($1 = 0.9472 euros)
