European automakers are struggling to match the rapid progress of their Chinese counterparts in the electric vehicle market. This shortfall poses challenges for the EU’s green transition, which plans to phase out combustion vehicles by 2035.
Chinese battery giant CATL and Stellantis announced plans to build a battery factory in Zaragoza, Spain. The facility will produce lithium iron phosphate batteries, with production set to begin by 2026.
Investing in Renewable-Powered EV Manufacturing
The €4.1 billion investment aims to create a carbon-neutral facility by leveraging Spain’s renewable energy resources. The partnership is part of a broader strategy to bolster Europe’s EV production capabilities and reduce dependence on imported batteries.
CATL already operates two battery factories in Europe, located in Germany and Hungary. The new plant in Spain will further enhance Europe’s ability to meet its EV production goals.
Spain, the EU’s second-largest car producer, is a critical player in this initiative. Spanish Prime Minister Pedro Sánchez’s recent meeting with CATL Chairman Robin Zeng underscores the collaboration’s strategic importance for both countries.
Despite these efforts, European automakers continue to face stiff competition from China’s advanced EV industry. Tariffs on Chinese imports are part of ongoing attempts to protect Europe’s domestic market and encourage local production.