CATL to build a third battery factory in Europe with Stellantis in Spain

Despite the European Union’s (EU) efforts to tighten the rules around Chinese industry entering the bloc, Chinese groups appear to be putting down ever deeper roots in Europe. After backing new car plants, China is now moving further up the supply chain, with another battery production site being planned on European soil.

CATL and Stellantis: a new battery plant in Zaragoza

CATL, one of China’s largest battery manufacturers, is set to fund the construction of a third battery factory in Europe, this time in Spain. As reported by the Financial Times, around 2,000 workers will be sent in to build the facility.

Location, investment and start date

The plant is expected to be based in Zaragoza and will be created through a joint venture with Stellantis. Because of that partnership, it should be positioned close to one of the Group’s car factories. In total, more than €4 billion is expected to be invested.

Construction has not yet begun, but the site is expected to start production by the end of next year.

To help deliver the project, Stellantis is relying on €298 million from the NextGenerationEU fund, a temporary support package launched in 2020 with the aim of helping Member States recover economically.

A CATL battery factory kept under lock and key

Bringing the factory to Europe does not necessarily mean bringing the expertise with it. That is the implication of comments made by José Juan Arceiz, a member of Stellantis’s European works council, to the Financial Times: “I don’t think the Chinese want to share the know-how with us. That’s one of the reasons they are going to hire 2,000 workers to build and install the factory.”

Joris Teer, an economic security analyst at the European Union Institute for Security Studies, also pointed to a broader strategic direction: “Xi Jinping, president of the People’s Republic of China, is trying to turn the country into a self-sufficient fortress, while making the rest of the world even more dependent on Chinese labour.”

Skills transfer, training and recruitment

Matt Shen, CATL’s managing director in Europe, pushed back against the speculation, telling the UK newspaper that he is prepared to “work together” with smaller European battery manufacturers.

Alongside this, the Chinese battery maker said it intends to train and recruit local staff to run its factories-an approach it has already taken at its German site, which has been operating since 2022.

Overall, the company has said it plans to hire around 3,000 workers for the new facility, with most of them being Spanish.

Portugal on the route for Chinese batteries

Earlier this year, CALB (China Aviation Lithium Battery) announced a €2 billion investment in Portugal to build a lithium-ion battery factory in Sines. All the details are in this article: