Chinese battery manufacturer CATL and multinational automaker Stellantis have unveiled plans to construct a €4.1 billion electric vehicle (EV) battery factory in Figueruelas, near Zaragoza, northern Spain.
The plant, projected to start production in 2026, will manufacture lithium iron phosphate (LFP) batteries, a key component in the green transition of Europe’s automotive industry.
The factory will have a production capacity of 50 GWh and aims to achieve carbon neutrality, leveraging Spain’s abundant solar, wind, and hydroelectric energy resources. The announcement follows a year of negotiations between Stellantis, CATL, and the Spanish government, with the final agreement coinciding with a meeting between Spanish Prime Minister Pedro Sánchez and CATL Chairman Robin Zeng earlier this week.
EU’s shift to electric vehicles
The joint venture represents a significant step in the European Union’s push to transition away from internal combustion engines, which will be banned from 2035. The EU has imposed tariffs on EVs imported from China to encourage local production and job creation. CATL’s decision to invest in Spain aligns with this strategy, positioning the country as a hub for EV battery manufacturing.
Spain, the EU’s second-largest car producer after Germany, has been increasing its EV production. According to the Spanish Association of Automobile and Truck Manufacturers (ANFAC), EV output rose from 16,000 units in 2019 to 323,000 in 2023, although this still represents only 13% of the country’s total vehicle production.
Government support and public-private collaboration
Spain’s ambitious plans to attract green investment were bolstered by European recovery funds. The Figueruelas plant received significant public funding, including €133 million from the Perte VEC III programme and an additional €14 million under the Perte Industrial Decarbonisation initiative. Prime Minister Sánchez highlighted the importance of public-private collaboration, praising the commitment of Stellantis and CATL to Spain’s decarbonised future.
“This project reflects the trust international investors place in Spain and underscores our position in the transition to sustainable transport,” said Sánchez on social media.
Industry Minister Jordi Hereu described the project as a “great signal” of confidence in Spain’s automotive sector, which continues to attract significant investment. Similarly, Rubén Alonso, president of the workers’ committee at Stellantis’ Figueruelas plant, celebrated the announcement as recognition of the factory’s consistent performance and its role in bolstering the regional automotive industry.
Addressing challenges in Europe’s EV industry
While Chinese companies like CATL lead global EV battery production, Europe has struggled to compete. Northvolt, a key European player, declared bankruptcy last month, highlighting the challenges faced by domestic manufacturers. Furthermore, CATL, which already operates plants in Germany and Hungary, plans to use the Zaragoza facility to strengthen its European operations and meet growing demand from automakers.
Stellantis, whose brands include Citroën, Fiat, Opel, and Jeep, has a strong presence in Spain, with factories in Zaragoza, Vigo, and Madrid. The group’s commitment to electric mobility is evidenced by its partnership with CATL, established in 2023 to supply LFP battery cells and modules for EV production in Europe.
Future outlook
The new gigafactory is expected to create jobs and cement Spain’s position as a leader in Europe’s EV market. Although specific employment figures have yet to be disclosed, stakeholders remain optimistic about the plant’s potential to boost regional economic development.
Volkswagen Group, through its Spanish affiliate SEAT, has also invested in EV battery production, announcing plans for a factory in Valencia. These developments demonstrate Spain’s growing prominence in the shift towards sustainable automotive technologies.
As Stellantis and CATL prepare for the 2026 launch, the Figueruelas factory stands as a testament to Spain’s strategic importance in Europe’s green transition, reinforcing its position as a key player in the global automotive industry.