Japan based electric vehicle (EV) battery manufacturer AESC Group has begun construction of a new, full scale battery plant in Navalmoral de la Mata in Spain’s Caceres province.

AESC, majority-owned by China’s Envision Energy, said it would invest US$1.1bn in the first phase of construction of the plant which was scheduled to be become operational in 2026 with a production capacity of 30GWh of EV batteries per year. It was expected to be Europe’s first mass production facility for lithium iron phosphate (LFP) batteries, a lower cost alternative to the lithium ion batteries widely used today.

The groundbreaking ceremony was attended by AESC’s newly appointed CEO for the US and Europe Knudt Flor, Spanish prime minister Pedro Sanchez and the mayor of Navalmoral de la Mata Enrique Hueso.

AESC said the new factory would provide competitively priced, high quality, long cruising range batteries, without disclosing which vehicle manufacturers it would supply. The company had long term deals with automakers including Renault, Nissan, Daimler and Honda.

AESC already had a factory in the UK supplying Nissan and was scheduled to complete construction of a battery plant in northern France later this year to supply Renault. It had factories in China and Japan and was also building plants in the US.

The latest plant was expected to help speed up the transition to zero emission vehicle manufacturing in Spain, Europe’s second-largest vehicle producer after Germany. The company said the facility would also become the first carbon neutral gigafactory in the country.

AESC said the plant would directly create an initial 900 jobs but that number would rise as production increased.

The company was collaborating with local universities and regional authorities to create training programmes for its employees.

Speaking at the groundbreaking event, Flor emphasised the company’s commitment to growing the country’s electrification supply chain by supplying advanced EV batteries.

Sanchez added the project “will undoubtedly help boost the region as it will create hundreds of jobs in its initial phase”, adding it would position Spain’s remote mountainous region of Extremadura at the forefront of Europe’s zero emissions vehicle transition.