Stellantis, CATL plans to set up a factory in Europe to produce cheaper electric car batteries

Stellantis, CATL plans to set up a factory in Europe to produce cheaper electric car batteries

  • Stellantis is already building 3 giant factories in Europe
  • Last month, it announced an investment in the Chinese company Leapmotor
  • Talks on joint venture with CATL will take ‘a few more months’
  • LFP batteries are cheaper but less powerful than NMC batteries

MILAN, Nov 21 (Reuters) – Stellantis (STLAM.MI) plans to build an electric vehicle battery factory with China’s CATL (300750.SZ) in Europe, its fourth plant in the region, as the European automaker seeks to make cheaper batteries and Affordable electric.

The electric car battery plans also represent a further strengthening of ties with China after the Franco-Italian automaker closed its previous joint venture, Guangzhou Automotive Group (601238.SS), last year. Last month, Stellantis announced a $1.6 billion deal to buy a stake in Chinese electric car maker Leapmotor (9863.HK).

Stellantis and CATL on Tuesday announced an initial agreement to supply lithium iron phosphate (LFP) battery cells and modules for electric vehicle production in Europe, and said they were considering establishing a 50-50 joint venture in the region.

Maxime Pikat, head of global purchasing and supply chain at Stellantis, said the joint venture plan with CATL was to build a new mega-factory in Europe to manufacture LFP batteries.

LFP batteries are cheaper to produce but less powerful compared to nickel-manganese-cobalt (NMC) batteries, the other current dominant technology.

Discussions are ongoing with CATL regarding the joint venture plan, and a few more months are needed to finalize it, Bekat said, declining to provide details about the potential location of the new battery facility. This will be CATL’s latest investment in the region, as it expands beyond its home market.

European automakers and governments are pumping billions of euros into building battery factories in their territories to reduce their dependence on Asia. Meanwhile, Chinese battery manufacturers such as CATL are building factories in Europe for European-made electric vehicles.

Pikat said the deals with CATL would complement the group’s electrification strategy, with LFP batteries helping to reduce production costs in Europe, while maintaining production of NMC batteries for more expensive cars.

The LFP batteries fit Stellantis’ low-cost electric cars like the recently unveiled Citroen e-C3, which now costs less than €23,300 ($25,400) and is expected to drop to around €20,000 for its shorter-range version.

However, Pikat said LFP batteries, which compromise between autonomy and cost, will have a wide range within the group, as affordability is key.

“Certainly what we are aiming for is to grow these LFP batteries across multiple sectors, because affordability is needed in many different sectors, whether it is passenger vehicles or potential commercial vehicles,” he said.

In Europe, Stellantis – which owns brands including Jeep, Peugeot, Fiat and Alfa Romeo – is building three giant plants in France, Germany and Italy through its ACC joint venture with Mercedes (MBGn.DE) and Total Energies (TTEF.PA). ), specializes in NMC chemistry.

Under Tuesday’s agreement, CATL will initially supply Stellantis with LFP batteries for electric vehicles in passenger cars, crossovers and small and medium-sized SUVs. ($1 = 0.9168 euros)

Reported by Giulio Piovaccari. Edited by Josephine Mason and Keith Weir

Our Standards: The Thomson Reuters Trust Principles.

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