Chrysler, Dodge, Jeep, and Citroen parent Stellantis and China-based energy solutions company CATL announced the launch of a new joint venture, with an agreement to invest up to €4.1 billion (USD$4.3 billion) aimed at building a large-scale EV battery plant in Spain.

According to the companies, the new facility will produce lithium iron phosphate (LFP) batteries, which are typically less expensive to produce than higher energy density lithium-ion nickel manganese cobalt (NMC) batteries, enabling the production of more affordable EVs.

Stellantis said that the new plant will enable the company to offer “more high-quality, durable and affordable battery-electric passenger cars, crossovers and SUVs in the B and C segments with intermediate ranges.”

Stellantis Chairman John Elkann said:

“Stellantis is committed to a decarbonized future, embracing all available advanced battery technologies to bring competitive electric vehicle products to our customers. 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.”

Located at Stellantis’ plant in Zarazoga, Spain, the new battery plant will be implemented over several phases, with production expected to begin by the end of 2026, and plans to reach capacity of up to 50 GWh. The companies added that the new plant has been designed to be completely carbon neutral.

Robin Zeng, Chairman and CEO of CATL, 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.”