Stellantis announced on Tuesday its intention to collaborate with China’s Contemporary Amperex Technology Co. Limited (CATL) in the construction of an electric vehicle (EV) battery plant in Europe. This marks Stellantis’ fourth such facility in the region, as the European automaker endeavors to produce more economical batteries and enhance the affordability of electric vehicles.
The preliminary agreement between the two companies outlines the supply of lithium iron phosphate (LFP) battery cells and modules for Stellantis’ EV production in Europe. Additionally, they are contemplating the formation of a 50-50 joint venture in the region. Maxime Picat, Stellantis Global Head of Purchasing and Supply Chain, indicated that the joint venture aims to establish a new gigafactory in Europe dedicated to the production of LFP batteries, known for their cost-effectiveness compared to nickel manganese cobalt (NMC) batteries.
While discussions are ongoing regarding the joint venture with CATL, Picat mentioned that a few more months are required to finalize the plans. However, he refrained from providing specific details about the potential location of the new battery facility.
If realized, this joint venture would represent CATL’s latest investment in Europe, aligning with the company’s expansion beyond its domestic market. European automakers and governments are making substantial investments in local battery plants to reduce reliance on Asian suppliers. Simultaneously, Chinese battery manufacturers like CATL are establishing production facilities in Europe to cater to the demand for locally manufactured electric vehicles.
Picat emphasized that the collaboration with CATL complements Stellantis’ electrification strategy. The use of LFP batteries is expected to reduce production costs in Europe, while the output of NMC batteries will continue for higher-end vehicles.
“Affordability is a key, and that’s where LFP is today the best technology you can find on the market in that compromise between autonomy and cost,” Picat stated. “That’s where we bring that second very important stage to our strategy in Europe.”
Stellantis, the owner of renowned brands such as Jeep, Peugeot, Fiat, and Alfa Romeo, is currently constructing three gigafactories in France, Germany, and Italy through its ACC joint venture with Mercedes and TotalEnergies, specializing in NMC chemistry.
CATL Chairman and General Manager Robin Zeng expressed that the partnership “will be a decisive step on both parties’ journey towards carbon neutrality goals.”
Under the agreement announced on Tuesday, CATL will initially supply LFP batteries to Stellantis for EVs in its passenger car, crossover, and small and medium-sized SUV segments. Since its establishment in early 2021 through the merger of Fiat Chrysler and Peugeot maker PSA, Stellantis has secured multiple supply agreements for materials essential to its global EV production.
