Spain electrified as CATL and Stellantis agree gigafactory deal

A groundbreaking $4 billion joint venture has been signed in Spain as Chinese battery giant CATL and carmaker Stellantis charge ahead with a new 50GW electric vehicle (EV) plant in Zaragoza.

Construction will begin in June 2025 in Zaragoza, northeastern Spain, with the aim of making one million batteries by 2028, generating revenue of over $10 billion.

It's a 50-50 joint venture between Chinese company CATL and multinational car manufacturer Stellantis.

The plant will manufacture lithium-ion phosphate (LFP) batteries, which experts argue are safer, pack more power, and are longer-lasting.

It's great news for the local economy with 3,000 new jobs set to be created directly and many more indirectly.

MG to follow CATL's lead?

Spain's Industry Minister Jordi Hereu said that Stellantis signed the deal after an amount of Spanish state funding was agreed.

"This agreement reached for the joint venture with this leading Chinese company in battery manufacturing is a very significant step in the strategy for electrification and the transformation of the automotive industry," said Hereu. 

The European EV Battery industry was worth $6.5 billion in 2023 and is expected to grow to more than $10.5 billion by 2032.

CATL is the king of electric car batteries with 30 percent of the global market and is Tesla's biggest supplier, while Stellantis has some big names like Alfa Romeo, Chrysler, Maserati, and Peugeot in its portfolio.

With the close relationship between CATL and Chinese carmaker MG, hopes are high in the region that MG will also choose Zaragoza as the site for its first European factory. Logistically that makes a lot of sense, to build the cars next to where they produce the batteries.

Jorge Azcón, the president of the Aragon region where the city of Zaragoza is located, gave more details on the plant, revealing that the Peugeot 208 and Opel Corsa will be the first car models to receive batteries from the plant.

Chinese car companies looking for European partners

Not so long ago it was European car manufacturing titans looking for Chinese partners to set up shop in China - the world's biggest car market. Now the wheel has turned.

China became the world's top auto exporter in 2023, surpassing Japan, and its companies are expanding fast – partly to create local manufacturing partnerships, because making cars in Europe will allow Chinese automakers to avoid tariffs.

CGTN spoke to Christian Hochfeld, executive director of Agora Verkehrswende, a Berlin-based think tank that seeks to promote climate-friendly mobility.

"It's good that they [Chinese car companies] also come to Europe," declared Hochfeld. "We've seen this successfully for 40 years in China, so now we're doing it the other way around, but hopefully as successful as it was in the last 40 years."

The plant follows other big EU announcements like BYD's gigafactory in Hungary and Chery's takeover of a factory in Barcelona.

The EU has ambitious goals to cut CO2 emissions from cars by 55 percent and from vans by half by 2030, proposing an outright ban on combustion engine cars by 2035. 

This new gigafactory can help meet those targets. Electrifying news for Spain both economically and environmentally.