CATL and Stellantis break ground on Spain’s largest EV battery plant

Chinese group CATL and carmaker Stellantis held a groundbreaking ceremony on Wednesday for their joint venture to create a major lithium iron phosphate (LFP) battery factory in the Aragon region of northeastern Spain.

The deal, first announced last year, constitutes one of the largest Chinese industrial investments in the country.

On Wednesday, joint venture executives said the project was expected to create 4,000 jobs. This follows criticism of the project, with media reports suggesting that up to 2,000 Chinese workers could be involved in construction, replacing local employees. Andy Wu, CEO of the joint venture, declined to confirm these figures, saying the final figures have not yet been decided while the company is still in the process of selecting a subcontractor.

The factory will run entirely on renewable energy and is expected to begin production by the end of 2026, with planned production of 50 gigawatt hours of LFP batteries per year, supplying electric vehicles across Europe.

Spain’s Minister of Industry, Trade and Tourism, Jordi Hereu, called the inauguration a “strategic milestone” for Spain’s energy transition and industrial modernization.

Speaking at the ceremony, he highlighted the partnership as a reflection of strong trust between Spanish and Chinese companies, and highlighted Spain’s role in Europe’s electrification efforts, according to Xinhua.

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Spain has been relatively open to Chinese investment compared to some EU countries. The country produced more than half of its electricity from renewable sources last year and relies on imported critical raw materials, solar panels and green technologies to accelerate the transition away from fossil fuels.

And Chinese control over these materials is considerable. The Chinese half of the joint venture, CATL, is the world’s largest manufacturer of electric vehicle batteries. The company counts Tesla, BMW and Volkswagen among its customers, and is continuing its European expansion. Existing production in Erfurt, Germany has been idling since 2022, while full-scale production in Debrecen, Hungary is expected to begin in the coming months.

CATL also has significant influence on the global electric vehicle supply chain through large-scale mining investments in lithium, nickel and cobalt, in China and abroad, including projects in Indonesia and Bolivia.