Automotive giant Stellantis and China-based CATL plan to set up a European plant to produce lithium-iron-phosphate (LFP) batteries.
The two companies signed a non-binding memorandum of understanding (MoU) on Tuesday (21 November), outlining the roadmap as well as the future value chain opportunities in the region.
“This MoU with CATL and LFP battery chemistry is another ingredient in our long-term strategy to protect freedom of mobility for the European middle class,” said Stellantis CEO Carlos Tavares. “CATL is the industry leader in this sector, and together with our iconic vehicle brands, we will bring innovative and accessible battery technology to our customers while helping us achieve our carbon bet zero ambition by 2038.”
Lithium-based batteries are becoming an increasingly popular option for electric vehicle (EV) manufacturers due to their lightness and high energy density. According to GlobalData, lithium-iron-phosphate will slowly erode the dominance of lead-acid batteries, which are generally bigger and heavier, give off harmful gases and are less energy-dense. Experts forecast that battery electric vehicles (BEVs) will account for 18% of the total market volume by 2025, with global BEV production reaching 17.3 million units.
Stellantis is a Netherlands-based automotive manufacturer with a total market capitalisation of €59.39bn ($65.06bn) as of 21 November. At the end of October, the company said it would invest €1.5bn to acquire a 20% stake in Chinese car producer Leapmotor.
Robin Zeng, chairman and general manager of CATL, welcomed the signing of the MoU. His company, valued at $111.56bn, saw its open price jump from CNY182.00 ($25.54) per share to CNY183.87 before going down to CNY180.61 at the time of reporting.
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“We are very pleased to elevate our cooperation with Stellantis to a new level. With Stellantis’ time-honoured expertise in car manufacturing and CATL’s advanced battery technology, we believe the partnership will be a decisive step on both parties’ journey towards carbon neutrality goals,” Zeng said. “We will remain dedicated to delivering more competitive and sustainable solutions for our partners to promote global energy transition.”
The two companies have revealed no details about the location of the plant.