China’s CATL and carmaker Stellantis held a groundbreaking ceremony on Wednesday for their joint venture to create a major lithium iron phosphate (LFP) battery plant in the Aragon region of northeastern Spain.
The deal, first announced last year, marks one of the largest Chinese industrial investments in the country.
On Wednesday, executives from the joint venture said the project is expected to create 4,000 jobs. It follows criticism of the project as media reports have suggested up to 2,000 Chinese workers may be involved in the construction, replacing local employees. Andy Wu, CEO of the joint venture, declined to confirm these figures, saying the final numbers have not yet been decided while the company is still selecting a subcontractor.
The plant will run entirely on renewable energy and is scheduled to begin production by the end of 2026, with a projected output of 50 gigawatt-hours of LFP batteries per year, supplying electric vehicles across Europe.
Spanish Minister of Industry, Trade and Tourism Jordi Hereu described the groundbreaking as a “strategic milestone” for Spain’s energy transition and industrial modernisation.
Speaking at the ceremony, he highlighted the partnership as a reflection of strong confidence between Spanish and Chinese companies, and underscored Spain’s role in Europe’s electrification efforts, according to Xinhua.
Spain has been relatively open to Chinese investment compared with some EU countries. The nation was generating more than half of its electricity from renewable sources last year and relies on imported critical raw materials, solar panels, and green technologies to accelerate the transition away from fossil fuels.
And Chinese control over these materials is substantial. The joint venture’s Chinese half, CATL, is the world’s largest EV battery manufacturer. The company’s customers include Tesla, BMW, and Volkswagen, and it is pursuing further European expansion. Existing production in Erfurt, Germany, has been ticking over since 2022, while full-scale production in Debrecen, Hungary, is expected to begin in the coming months.
CATL also has a significant influence over the global EV supply chain through large-scale mining investments in lithium, nickel, and cobalt, in China and abroad, including projects in Indonesia and Bolivia.
