China’s third biggest battery maker builds new factory in Portugal

CALB, after CATL and BYD, is China’s third-biggest battery maker. It has broken ground for a brand new factory in the Portuguese deepwater port of Sines, halfway on the Atlantic coast between Lisbon and Lagos. All three invest heavily in European battery factories, while the old continent is lagging with its own trumpeted ‘Airbus of Batteries’ project.

In the first phase, the factory will produce an annual capacity of 15 GW, enough to power approximately 300,000 electric vehicles (EVs) for international customers, including Toyota, Volkswagen, Ford, and Audi.

At the ceremony held on Monday in Lisbon, CALB announced an investment of around two billion euros, considered a Project of National Interest (PIN). The project should create 1,800 direct jobs and will have “a significant impact on the Portuguese economy.”

The Chinese manufacturer says it could “represent more than 4% of the national GDP [Gross Domestic Product] of a country like Portugal when it reaches full production capacity in 2028.” In November 2022, CALB signed a memorandum of cooperation with the Portuguese government to build its first European production site.

Ideal location

According to the battery maker, the port of Sines was chosen because it’s Europe’s second-largest deep-water port with 24-hour operations and the only port in Portugal to dock the world’s largest container freighters. It’s also the start and end point of Portugal’s largest rail freight platform, operating more than 5,000 container trains annually.

According to Chinese media, CALB has planned its first European battery plant in Portugal mainly because the country “is friendly to China at the political level and has the largest lithium reserves in Europe and the eighth-largest in the world.”

“Our factory will not only create new jobs but will also place Portugal at the forefront of the production of batteries for electric vehicles in Europe,” Liu Jingyu, president of the Board of Directors of CALB, said.

According to CnEVPost, quoting figures from South Korean market researcher SNE Research, CALB is the world’s fourth-biggest battery maker, with a 4.7% market share after CATL (37.9%), BYD (17.2%), and Korean LG Energy Solutions.

With CALB starting its first battery factory in Europe, all three major Chinese battery makers are present on the Old Continent. In December 2024, CATL announced that it would build a new factory at Stellantis’ Zaragoza site in Spain to produce low-cost lithium iron phosphate (LFP) batteries in a 50/50 joint venture. This will be CATL’s third battery factory in Europe.

BYD (Build Your Dreams) plans to manufacture EV components in Europe and assemble battery packs at its plants in Hungary and Turkey, with only the battery cells imported from China.

And Europe itself?

Meanwhile, Europe’s initiatives are lagging.  Northvolt, once a beacon of Europe’s aspirations for a homegrown battery supply chain to rival Chinese dominance, has faced mounting pressures in recent months.

After filing for Chapter 11 bankruptcy protection in the US last November, the company revealed debts amounting to billions of euros. The bankruptcy proceedings are aimed at shielding the company from creditors.

The market uncertainty surrounding electric car sales impacts the Franco-German battery cell manufacturer Automotive Cells Company’s (ACC) plans. The joint venture of Stellantis, Mercedes, and TotalEnergies has decided already several months ago to pause the construction of its factories in Germany and France. In addition to the EV slowdown, other reasons are cited.

ACC unveiled big plans three years ago. By centralizing their research efforts and investing 7 billion euros, they would prepare enough battery cell output for their car brands to be fully electric. It laid out the blueprint for the production of more than 200 GWh annually in eight factories all over the world. There was no time to waste.

European  Battery Alliance

The European Commission launched the European Battery Alliance in October 2017 to address this industrial challenge. It brings together EU national authorities, regions, industry research institutes, and other stakeholders in the battery value chain.

In total, 440 industrial and innovation actors have already joined the alliance. According to the latest High-level meeting held in Brussels in May 2024, this has helped reach 30 gigafactory
projects, with a total manufacturing capacity of 167 GWh installed in 2023.

The Commission claimed it had channeled funding to support the development of the battery sector, raising EUR 6 billion and leveraging up to almost EUR 14 billion. With the Alliance, it has set up the Battery Academy and trained 67,000 people in battery-related skills. However, it looks like the Chinese are still miles ahead in managing the whole cycle.