CATL, the world’s largest manufacturer of automotive batteries, and automotive giant Stellantis have started construction of a battery factory in Figueruelas, near Zaragoza. The expected capacity of the LFP battery factory is up to 50 kWh, enough to supply tens of thousands of EVs with batteries each year.
For CATL, this is the third battery factory in Europe, following earlier installations in Germany and Hungary. The factory, which is scheduled to start production around the end of 2026, is expected to create up to 4,000 jobs. The project involves an investment of 4.1 billion euros.
No cobalt or nickel
The laying of the foundation stone took place on Wednesday, near the existing Stellantis car assembly facility. The project involves a new lithium-iron-phosphate (LFP) battery factory to make it fully CO2-neutral.
About 2,000 Chinese workers will participate in the factory’s construction, followed by the recruitment and training of 3,000 Spanish employees, Reuters reported, citing union representatives.
With this factory, Stellantis – the group behind brands such as Peugeot, Citroën, Opel, Chrysler, Fiat, Alfa Romeo, and Maserati – wants to strengthen its ‘dual-chemistry’ battery strategy: both cheaper LFP, for models in the B and C segments, and ‘classic’ battery technologies can be used, keeping EVs affordable and viable.
In other words, it has lower costs but good sustainability, because LFP technology uses no cobalt or nickel, resulting in less environmental impact during extraction and recycling. However, raw material extraction and the supply chain remain environmentally critical.
Battery hub for the EU
Spain, Europe’s second-largest car manufacturer after Germany, with 2.3 to 2.4 million vehicles per year, is rapidly establishing itself as a crucial ‘battery hub’ for the EU’s EV industry. For example, the Volkswagen Group is investing around 10 billion euros to build a large battery factory in Sagunto (near Valencia), with a planned capacity of 40 GWh.
There are also plans for other factories, such as Envision AESC in Navalmoral de la Mata (Cáceres) and Basquevolt near Vitoria-Gasteiz (Basque Country). At the same time, Slovakian battery technology company InoBat wants to build a gigafactory in Valladolid.
It is therefore not surprising that Spain, together with France, is insisting on the strict enforcement of the EU ban on new combustion engines from 2035.
EU vs. China
The EU is also investing 300 million euros in the factory in Figueruelas, in northeastern Spain, precisely to reduce its reliance on Asian suppliers and further promote e-mobility. At the same time, it will also gain access to knowledge about the technology, something that Spain actually lacks.
However, it is CATL, or Contemporary Amperex Technology Co. Ltd., that will benefit most. After all, the EU remains heavily dependent on the Chinese supply chain, especially for raw materials such as lithium.
At the same time, the EU is increasingly imposing anti-dumping and anti-subsidy measures on Chinese products. By manufacturing in Europe, CATL can avoid EU import duties and label its batteries as ‘EU-made,’ which is more favorable for subsidies and tenders.
CATL produces one-third of all car batteries worldwide. It supplies Tesla, Mercedes-Benz, Volkswagen, and Toyota, among others. The battery manufacturer has 100,000 employees spread across 13 factories worldwide.
