Chinese battery manufacturer CATL and multinational automotive giant Stellantis have announced that they will join forces in the production of battery cells in Europe to reduce costs of a key component for electric vehicles.
The two companies have preliminarily agreed on the production of lithium iron phosphate (LFP) battery cells, which Stellantis will integrate into its electric cars and sell in the European market.
There are also plans to establish a joint company with equal ownership stakes.
Lithium iron phosphate batteries mean lower production costs but also less driving power compared to nickel manganese (NMC) batteries.
Collaboration with CATL will complement Stellantis’s electrification strategy, said the automotive giant’s procurement chief Maxime Picat, adding that lithium iron phosphate batteries will reduce production costs in Europe.
The group will continue to use nickel manganese batteries for more expensive cars, Picat added.
Stellantis is currently building three gigafactories in Europe, in France, Germany, and Italy, in partnership with Mercedes and TotalEnergies.
CATL’s President and CEO Robin Zeng stated that the partnership ‘will be a decisive step on the path of both companies towards carbon neutrality goals.’
