Stellantis and China’s Contemporary Amperex Technology (CATL) have agreed to invest up to €4.1bn ($4.3bn) in a joint venture to build a lithium iron phosphate (LFP) battery plant in Zaragoza, Spain.

The “large-scale” facility, will be fully carbon neutral, and is planned to be implemented in several phases, with investment milestones aligned with the project's development.

The two companies have formed a 50-50 joint venture and aim to begin production by the end of 2026.

The plant’s capacity could reach up to 50GWh, contingent on the evolution of the European EV market and ongoing support from Spanish and European Union authorities, the companies said.

This collaboration follows a non-binding memorandum of understanding (MOU) signed in November 2023, which outlined plans for the local supply of LFP battery cells and modules to support Stellantis’ electric vehicle production in Europe.

The partnership also focuses on advancing Stellantis’ battery electric vehicle (BEV) technology and further enhancing the battery supply chain in Europe.

Stellantis chairman John Elkann said: “Stellantis is committed to a decarbonised future, embracing all available advanced battery technologies to bring competitive electric vehicle products to our customers,

“This important joint venture with our partner CATL will bring innovative battery production to a manufacturing site that is already a leader in clean and renewable energy, helping drive a 360-degree sustainable approach.”

CATL chairman and CEO Robin Zeng said: “The joint venture has taken our cooperation with Stellantis to new heights, and I believe our cutting-edge battery technology and outstanding operation knowhow combined with Stellantis’ decades-long experience in running business locally in Zaragoza will ensure a major success story in the industry.

“CATL’s goal is to make zero-carbon technology accessible across the globe, and we look forward to cooperating with our partners globally through more innovative cooperation models.”