Stellantis, the European automotive powerhouse behind renowned brands like Jeep, Peugeot, Fiat, and Alfa Romeo, is embarking on a pivotal collaboration with China’s CATL to establish an electric vehicle (EV) battery plant in Europe.
This strategic move marks Stellantis’ fourth battery facility in the region, aimed at revolutionizing electric vehicle (EV) production by focusing on cost-efficient batteries for more affordable EV models.
In a recent news announcement, the two companies unveiled a preliminary agreement to facilitate the supply of lithium iron phosphate (LFP) battery cells and modules for Stellantis’ EV manufacturing ventures across Europe.
Alongside this collaboration, discussions are underway for a potential 50-50 joint venture to establish a gigafactory dedicated to manufacturing LFP batteries, known for their cost-effectiveness compared to the prevalent nickel manganese cobalt (NMC) technology.
Maxime Picat, Stellantis’ Global Head of Purchasing and Supply Chain, emphasized that the joint venture with CATL is poised to construct a new gigafactory in Europe specifically geared towards LFP battery production. While LFP batteries offer lower power compared to NMC counterparts, they present a more economical option for EVs, aiming to reduce production costs and broaden the affordability of electric vehicles across various market segments.
Despite withholding details about the potential location of the upcoming battery facility, Picat confirmed ongoing discussions with CATL, estimating a few more months for finalizing the joint venture plan.
CATL’s involvement in this partnership signifies its expanding presence beyond its home market into Europe. This collaboration aligns with the broader trend in Europe’s automotive landscape, witnessing significant investments by both automakers and governments in local battery manufacturing to diminish reliance on Asian markets. Simultaneously, Chinese battery manufacturers like CATL are establishing their foothold in Europe, catering to the growing demand for European-made electric vehicles.
Picat emphasized that integrating LFP batteries into their electrification strategy would aid in cost reduction while maintaining the production of NMC batteries for higher-end vehicles. He highlighted the importance of affordability across various vehicle segments, including passenger and potentially commercial vehicles.
Stellantis, already engaged in the establishment of three gigafactories in France, Germany, and Italy through its ACC joint venture with Mercedes and TotalEnergies, specializes in NMC chemistry for these ventures.
Robin Zeng, CATL’s Chairman and General Manager, emphasized that this collaboration marks a pivotal stride toward achieving carbon neutrality objectives for both entities.
As part of the agreement, CATL will initially supply LFP batteries to Stellantis for EVs across its passenger car, crossover, and small to medium-sized SUV segments. Since its formation in early 2021 through the merger of Fiat Chrysler and Peugeot maker PSA, Stellantis has been actively securing multiple supply agreements to support its global EV production requirements.