Stellantis-CATL Collaboration for Affordable EV
Stellantis is set to establish its fourth electric vehicle (EV) battery plant in Europe, collaborating with China’s CATL as part of the European automaker’s strategy to produce more affordable EVs through cost-effective battery solutions.
This move strengthens Stellantis’ ties with China, following the closure of its previous joint venture, Guangzhou Automobile Group, last year. In a recent development, Stellantis also announced a $1.6 billion deal to acquire a stake in the Chinese EV manufacturer Leapmotor.
Preliminary Agreement for LFP Batteries
In a joint announcement on Tuesday, Stellantis and CATL revealed a preliminary agreement for the supply of lithium iron phosphate (LFP) battery cells and modules, emphasizing their consideration of a 50-50 joint venture in Europe. Maxime Picat, Stellantis Global Head of Purchasing and Supply Chain, stated that the proposed joint venture with CATL aims to establish a new gigafactory in Europe dedicated to manufacturing LFP batteries.
LFP batteries, though less powerful than nickel manganese cobalt (NMC) batteries, are more cost-effective to produce. Discussions are ongoing between Stellantis and CATL regarding the joint venture, and further details, including the location of the new battery facility, are expected to be finalized in the coming months.
The potential joint venture aligns with the trend of European automakers and governments investing significantly in domestic battery plants to reduce dependence on Asian suppliers. Concurrently, Chinese battery manufacturers like CATL are expanding their presence in Europe to cater to the growing demand for locally-produced EVs.
Picat highlighted that the collaboration with CATL complements Stellantis’ electrification strategy. The use of LFP batteries is intended to reduce production costs in Europe, allowing Stellantis to maintain the production of NMC batteries for higher-end vehicles.
Stellantis, the parent company of renowned brands such as Jeep, Peugeot, Fiat, and Alfa Romeo, is actively involved in building three gigafactories in Europe – located in France, Germany, and Italy through the ACC joint venture with Mercedes (MBGn.DE) and TotalEnergies (TTEF.PA), focusing on NMC chemistry.
Under the preliminary agreement, CATL will initially supply LFP batteries to Stellantis for EVs in various segments, including passenger cars, crossovers, and small to medium-sized SUVs. This strategic move aims to enhance the affordability of a wide range of Stellantis vehicles, aligning with the growing demand for cost-effective electric mobility solutions in Europe.
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