On November 21st, CATL announced that it has signed a strategic memorandum of understanding with Stellantis Group to supply lithium iron phosphate batteries to the group in Europe.
The joint statement of the two companies shows that CATL and Stellantis will engage in long-term cooperation in two strategic aspects. Firstly, they will develop a technology roadmap for electric vehicle batteries for the Stellantis Group, as well as identify opportunities to further strengthen the battery value chain. Secondly, both parties are exploring the possibility of establishing a joint venture on an equal basis.
Stellantis Group is the fourth largest automotive group in the world, formed by a 50:50 merger between PSA Group and Fiat Chrysler Automobiles. It is headquartered in the Netherlands. Its brands include Abarth, Citroën, Dodge, and more. The company plans to have all passenger cars sold in Europe be battery electric vehicles by 2030.
Maxime Picat, Global Head of Purchasing and Supply Chain at Stellantis, stated that the aforementioned joint venture aims to build a new mega factory in Europe for the production of lithium iron phosphate batteries. Compared to another mainstream battery technology, ternary lithium batteries, lithium iron phosphate batteries have relatively lower performance but also lower production costs.
The joint statement from CATL and Stellantis states, “Lithium iron phosphate battery technology has the characteristics of long lifespan and high thermal stability, which helps Stellantis provide customers with high-quality, durable, and affordable electric vehicles. This range includes sedans, crossovers, and SUVs in the B to C segment.”
Picat did not disclose the possible location of the factory. He stated that both parties are currently discussing the joint venture plan and it will take a few more months to finalize. If the factory is successfully confirmed, it will be CATL’s third European factory following their factories in Germany and Hungary.
During the performance briefing in the third quarter of this year, CATL expressed optimism towards the European market. “In recent years, due to macroeconomic factors, the European market has experienced some fluctuations. However, Europe remains committed to the transition to new energy and has implemented many supportive policies. Currently, there are different views on the outlook for Europe next year in the market. As the factors that have previously impacted industry growth weaken, the development trend of Europe’s new energy market is positive.”
In the European market, CATL’s German factory has already started production. The Hungarian factory is planned to have a capacity of 100 GWh, with the first phase of construction already underway and expected to be completed in about two years. In the first half of this year, CATL’s overseas revenue accounted for 35.49% of its total revenue.
In February of this year, CATL and Ford announced that they will jointly build a battery factory in Michigan, USA with a total investment of $3.5 billion. Ford owns the new factory while CATL provides construction and operational services, as well as licensing battery patent technology.