Stellantis deepens Europe’s reliance on China with CATL plant
[MADRID] Stellantis, the maker of Peugeot and Jeep vehicles, and China’s CATL broke ground on a 4.1 billion euros (S$6.2 billion) battery plant in northern Spain, a project that highlights Europe’s growing reliance on Chinese technology.
Despite European Union efforts to counter Beijing’s growing influence, Spain has emerged as a key ally. The investment was hailed by Prime Minister Pedro Sanchez’s administration, even though there has been criticism over Chinese company’s reliance on its own staff for the expansion.
“We are building the best investment model in Spain and in Europe,” Industry Minister Jordi Hereu said on Wednesday (Nov 26) after posing for photos with company executives. He called the future factory in Figuerelas “the best contribution that Spain can make to the re-industrialisation of Europe”.
The joint venture between Europe’s second-biggest carmaker and the battery maker, formally known as Contemporary Amperex Technology Co Limited (CATL) – has sparked controversy in Spain due to news reports that it plans to deploy about 2,000 Chinese workers to build and equip the facility.
Andy Wu, head of the venture, declined to provide concrete details, saying the process to sign up subcontractors is ongoing and the intent is to “hire great local employees”. Initially, hundreds of workers will arrive from China and will stay for one to two years, in part to train locals, a spokesperson added.
Stellantis and CATL intend to begin some production by the end of next year, and documents filed by the venture to local authorities show it aims to produce at 30 per cent of planned capacity by 2028. As it ramps up to full output in 2030, the factory is set to employ almost 4,000 people and produce about 50 gigawatt-hours of batteries per year.
Europe has struggled to compete with CATL and other Asian battery makers. The EU and private investors have injected billions of euros into local rivals, but Britishvolt in the UK and Northvolt in Sweden have gone insolvent despite the support. Stellantis and Mercedes’ Automotive Cells and Volkswagen’s PowerCo have also scaled back or delayed plans amid slow EV demand.
By contrast, CATL is continuing to expand. A factory it’s building in Hungary will produce several types of batteries instead of just lithium-ion ones. The joint venture, called Contemporary Star Energy, is contributing about 94 per cent of the funds invested in the Spain site, according to Wu.
Addressing concerns about supporting the local economy, China’s ambassador to Spain, Yao Jing, said the country will keep its “commitment of sharing technology”.
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“This is the first step, born from cooperation and a vision of what European strategic autonomy should be, one that is open with all countries of the world, especially a country such as China,” said Spain’s Hereu. BLOOMBERG
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