Imagine a factory CATL Stellantis so massive it could power one million electric vehicles annually. Now picture it being built entirely on renewable energy, creating 4,000 jobs, and representing one of the largest Chinese investments in Europe. That’s not a distant vision—it’s happening right now in Zaragoza, Spain, where CATL and Stellantis just broke ground on Europe’s most ambitious battery project.
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The Groundbreaking Moment That Shook Europe
On November 27, 2024, executives from CATL and Stellantis stood in northeastern Spain’s Aragon region, shovels in hand, marking the official start of construction on a €4.1 billion lithium iron phosphate battery gigafactory. Spanish Industry Minister Jordi Hereu called it a strategic milestone for Spain’s energy transition and industrial modernization.
This isn’t just another factory announcement. It’s the largest single industrial investment China has made in Spain, and it signals a dramatic shift in Europe’s EV supply chain—from dependence on distant suppliers to localized, carbon-neutral production.
The Partnership: East Meets West for Green Mobility
CATL and Stellantis formed a 50-50 joint venture called Contemporary Star Energy to build this facility, combining CATL’s world-leading battery technology with Stellantis’ decades of manufacturing experience in Zaragoza.
The Power Players:
| Partner | Contribution | Global Position |
|---|---|---|
| CATL | Battery technology, manufacturing expertise | World’s largest EV battery maker for 7 consecutive years |
| Stellantis | Local operations, automotive integration | Europe’s 2nd-largest carmaker (Jeep, Dodge, Peugeot, Fiat) |
| Investment | €4.1 billion ($4.8 billion) | One of Europe’s largest battery investments |
CATL’s customers include Volkswagen, Tesla, and BMW, while Stellantis owns iconic brands like Jeep, Dodge, Ram, Peugeot, Citroën, Fiat, Alfa Romeo, and more. Together, they’re creating a battery powerhouse designed to make affordable EVs accessible across Europe.
The Numbers: What €4.1 Billion Buys You
Let’s break down exactly what’s being built in Figueruelas, near Zaragoza:
CATL Stellantis Gigafactory Specifications:
| Metric | Details | Impact |
|---|---|---|
| Total Investment | €4.1 billion | One of largest industrial investments in Spain |
| Production Capacity | 50 GWh annually | Enough for ~1 million EVs per year |
| Jobs Created | 4,000 positions | 3,000 Spanish staff + skilled workforce |
| Site Size | 80 hectares | Adjacent to existing Stellantis plant |
| Production Start | End of 2026 | Aggressive 2-year timeline |
| Energy Source | 100% renewable | Completely carbon-neutral operations |
| Battery Chemistry | LFP (Lithium Iron Phosphate) | More affordable, durable than NMC |
Production is targeted to begin by the end of 2026, with capacity reaching up to 50 GWh—enough to power approximately one million electric vehicles annually.
Why LFP? The Chemistry Behind Affordable EVs
Stellantis isn’t betting everything on nickel-based batteries. They’re pursuing a dual-chemistry strategy, and LFP plays a crucial role in making EVs affordable for everyday Europeans.
LFP vs NMC Battery Comparison:
| Characteristic | LFP (This Plant) | NMC (Traditional) |
|---|---|---|
| Cost | Lower (30-40% cheaper) | Higher |
| Safety | Excellent (thermal stability) | Good but less stable |
| Lifespan | Longer cycle life | Moderate |
| Energy Density | Lower (intermediate range) | Higher (long range) |
| Best For | B & C segment vehicles | Premium, long-range EVs |
The 50-50 joint venture will boost Stellantis’ best-in-class LFP offer in Europe, enabling the automaker to offer more high-quality, durable and affordable battery-electric passenger cars, crossovers and SUVs in the B and C segments with intermediate ranges.
Translation: Expect more affordable Peugeot 208, Citroën C3, and Fiat 500 electric models powered by these Spanish-made batteries.
Spain’s Strategic Advantage: Why Zaragoza Won
CATL and Stellantis didn’t randomly select Spain. The country offers unique advantages that made this €4.1 billion bet make sense.
Spain’s Competitive Edge:
Spain generated more than half of its electricity from renewable sources in 2024, providing the clean energy needed for carbon-neutral battery production.
The country maintains a relatively open stance toward Chinese investment compared to other EU nations, facilitating faster approvals and collaboration.
Stellantis already operates three vehicle plants in Spain—Zaragoza, Vigo, and Madrid—creating immediate integration opportunities.
Zaragoza’s existing vehicle plant is already a leader in clean and renewable energy, making it ideal for sustainable battery manufacturing.
Minister Hereu highlighted that the partnership reflects strong confidence between Spanish and Chinese companies and underscores Spain’s role in Europe’s electrification efforts.
The Technology: Cutting-Edge Cell-to-Body Integration
Andy Wu, CEO of Contemporary Star Energy, emphasized that they’re introducing extreme modularity in product design and manufacturing, integrating cutting-edge cell-to-body technology.
What does this mean in practical terms? Instead of traditional battery packs bolted into vehicle frames, cell-to-body technology integrates batteries directly into the vehicle structure. This approach:
- Reduces weight by eliminating redundant structures
- Increases interior space without enlarging the vehicle
- Improves crash safety through distributed load bearing
- Lowers manufacturing costs through simplified assembly
Wu stated this will bring unprecedented flexibility while embedding the latest LFP technology into Stellantis’ STLA Small platform vehicles.
The Workforce Controversy: 2,000 Chinese Workers?
Not everything about this project has been smooth sailing. Media reports suggested up to 2,000 Chinese workers may be involved in construction, raising concerns about displacing local employees.
Andy Wu declined to confirm these figures, saying the final numbers haven’t been decided while the company is still selecting a subcontractor.
Here’s the reality: Auto industry representatives and unions pointed out that Spain lacks the technical know-how for producing EV batteries, with one source admitting, “We don’t know this technology, these components – we’ve never made them before…They’re years ahead of us. All we can do is watch and learn.”
Minister Hereu emphasized that technology transfer is fundamental to the project, meaning Spanish workers will gain cutting-edge battery manufacturing skills that don’t currently exist in Europe.
Carbon Neutral from Day One
The battery plant is designed to be completely carbon neutral, aligning with both CATL and Stellantis’ aggressive climate goals.
Sustainability Commitments:
- CATL Target: Carbon neutrality in core operations by 2025, across entire battery supply chain by 2035
- Stellantis Target: Carbon net zero corporation by 2038, all scopes included
- Plant Operations: 100% renewable energy from Spanish solar, wind, and hydro sources
This matters because battery production is traditionally carbon-intensive. By running entirely on renewables, the Zaragoza plant produces truly green batteries—reducing emissions not just during vehicle operation, but during manufacturing.
Europe’s Battery Independence: Geopolitical Implications
CATL has significant influence over the global EV supply chain through large-scale mining investments in lithium, nickel, and cobalt in China and abroad, including projects in Indonesia and Bolivia.
Europe recognizes it cannot achieve EV transition without securing battery supply. Currently, Europe depends on Asian imports for batteries, making the continent vulnerable to supply chain disruptions and geopolitical tensions.
CATL is bringing state-of-the-art battery manufacturing technology to Europe through its plants in Germany and Hungary, which are already operational. The Spanish facility will enhance its capabilities to support customers’ climate goals.
However, this Chinese dominance makes some European policymakers nervous. The European Commission is preparing new measures to strengthen the automotive sector and push for stricter local sourcing requirements—partly to protect European companies from Chinese rivals.
The Zaragoza plant represents a middle path: European production using Chinese technology, creating jobs in Spain while reducing dependence on imported batteries.
Timeline: From MOU to Mass Production
The speed of this project is remarkable by European standards:
Project Timeline:
| Milestone | Date | Significance |
|---|---|---|
| Non-binding MOU signed | November 2023 | Initial partnership agreement |
| Official investment announcement | December 10, 2024 | €4.1 billion commitment confirmed |
| Groundbreaking ceremony | November 27, 2024 | Construction officially begins |
| Construction completion | March 2028 (estimated) | Facility fully built |
| Production start | End of 2026 | First batteries manufactured |
| Full capacity | 2028-2030 | 50 GWh annual production |
Targeted to start production by end of 2026 at Stellantis’ Zaragoza site, the facility could reach up to 50 GWh capacity, subject to the evolution of the electrical market in Europe and continued support from authorities.
What This Means for European EV Buyers
Forget waiting until 2030 for affordable electric vehicles. This factory will produce batteries for the upcoming STLA Small platform, powering compact electric cars that everyday Europeans can actually afford.
Stellantis confirmed plans to manufacture electric small cars based on the STLA Small platform in Spain, and these Zaragoza batteries will power them. Think electric versions of popular B and C segment vehicles with pricing closer to traditional combustion models.
For Spanish consumers specifically, this creates a virtuous cycle: renewable energy powers battery production, which enables affordable EVs, which reduce fossil fuel dependence—all while creating thousands of high-tech jobs in Aragon.
The Competitive Landscape: ACC’s Struggles Create Opportunity
It’s worth noting that Stellantis’ other battery venture isn’t going as smoothly. ACC, the battery joint venture between Stellantis, Total, and Mercedes-Benz, had planned three plants but two projects in Kaiserslautern and Termoli are currently on hold, with reports suggesting the Termoli plant faces permanent closure.
This makes the CATL partnership even more critical for Stellantis’ electrification strategy. While ACC struggles with cost and technology challenges, CATL brings proven manufacturing expertise and competitive pricing.
The Bottom Line
The CATL-Stellantis gigafactory in Zaragoza represents more than €4.1 billion in concrete and steel. It’s a statement about Europe’s electric future—one where affordable EVs powered by locally-produced, carbon-neutral batteries become the norm, not the exception.
Robin Zeng, CATL’s Chairman and CEO, stated that their cutting-edge battery technology combined with Stellantis’ decades of local experience in Zaragoza will ensure a major success story in the industry.
By the end of 2026, batteries will roll off production lines in Spain, powering millions of European EVs. Technology transfer will train thousands of Spanish workers in skills that didn’t exist in Europe two years ago. And the entire operation will run on renewable energy, proving that industrial scale and environmental responsibility aren’t mutually exclusive.
