Stellantis, a Franco-Italian automaker, and Chinese battery giant Contemporary Amperex Technology Co Ltd announced on Tuesday an investment of 4.1 billion euros ($4.3 billion) to form a joint venture that will build a large-scale European lithium iron phosphate (LFP) battery plant in Zaragoza, Spain.

The move marked another major step of CATL, the world's largest electric vehicle battery maker, in overseas expansion, after it already brought battery manufacturing technology to Europe through its two plants in Germany and Hungary, which are already operational.

The facility, which is expected to start production by end of 2026, could reach up to 50 GWh capacity by then. The 50-50 joint venture between CATL and Stellantis will boost the latter's LFP offer in Europe enabling the automaker to offer more high-quality, durable and affordable battery-electric passenger cars.

In November 2023, Stellantis and CATL signed a non-binding MOU for the local supply of LFP battery cells and modules for electric vehicle production in Europe and established a long-term collaboration on two strategic fronts: creating a bold technology roadmap to support Stellantis' advanced battery electric vehicles (BEV) and identifying opportunities to further strengthen the battery value chain.

"Stellantis is committed to a decarbonized future, embracing all available advanced battery technologies to bring competitive electric vehicle products to our customers," said Stellantis Chairman John Elkann.

"This important joint venture with our partner CATL will bring innovative battery production to a manufacturing site that is already a leader in clean and renewable energy, helping drive a 360-degree sustainable approach," Elkann said.

"The joint venture has taken our cooperation with Stellantis to new heights, and I believe our cutting-edge battery technology and outstanding operation knowhow combined with Stellantis' decades-long experience in running business locally in Zaragoza will ensure a major success story in the industry," said Robin Zeng, chairman and CEO of CATL.