European automakers are falling behind Chinese competitors in the rapidly expanding electric vehicle market. The EU’s green transition hinges on the success of this sector, with a goal to eliminate internal combustion vehicles by 2035.

In response, Chinese battery giant CATL and Stellantis announced plans to build a major battery factory in Spain. The plant, located in Zaragoza, will produce lithium iron phosphate batteries, with production expected to start by late 2026.

A Sustainable Investment for Europe’s EV Future

The project represents a €4.1 billion investment and aims for carbon neutrality by utilizing Spain’s abundant renewable energy. This collaboration is part of a broader effort to strengthen Europe’s EV supply chain and reduce reliance on imported components.

CATL already operates two factories in Europe, located in Germany and Hungary. The new plant in Spain highlights CATL’s commitment to expanding its presence in Europe’s EV market.

Spain’s status as the EU’s second-largest car producer underscores its importance in this partnership. Recent discussions between Spanish Prime Minister Pedro Sánchez and CATL leadership reflect Spain’s focus on advancing its automotive and renewable energy sectors.

Meanwhile, European automakers continue to face significant challenges from China’s dominance in EV production. Tariffs on Chinese EV imports aim to foster local manufacturing and level the competitive landscape.