CATL and Stellantis have started building a €4.1 billion lithium iron phosphate battery gigafactory in Figueruelas, a small town near Zaragoza in Spain, in one of the largest Chinese industrial investments in Europe’s auto sector.
The joint venture plant, operated by Contemporary Star Energy, is designed for an annual capacity of 50 gigawatt hours, enough batteries to equip roughly 700,000 electric vehicles each year.
The project is expected to create up to 4,000 jobs once fully ramped and has already drawn strong political support in Spain, helped by more than €300 million in European Union funding and access to relatively low-cost renewable energy.
For Stellantis, the site fits into a broader strategy to secure affordable batteries for mass market models while balancing dependence on Asian technology with its own European ventures.
Why are CATL and Stellantis betting on an LFP gigafactory in Spain?
Stellantis and CATL chose lithium iron phosphate (LFP) chemistry for this gigafactory because LFP batteries trade some energy density for lower cost, long cycle life, and better thermal stability, making them ideal for mainstream B- and C-segment electric cars.
By combining this plant with nickel-rich chemistries elsewhere, Stellantis aims to serve both premium long-range models and more affordable city and family vehicles.
Spain offered a compelling mix of incentives, from EU-backed funding and regional support in Aragon to relatively low industrial electricity prices that are estimated to sit around 20 percent below the European Union average.
The plant will run entirely on renewable power, which is important for Stellantis and CATL as regulators and customers increasingly scrutinize the full carbon footprint of electric vehicle supply chains.
Did you know?
LFP batteries are the marathon runners of the battery world. They can typically withstand 2,500 to 5,000+ charge cycles before losing significant capacity. In comparison, traditional NMC batteries usually last between 1,000 and 2,000 cycles.
How will the Figueruelas plant power Europe’s electric vehicle ambitions?
At full capacity, the 50-gigawatt-hour plant could supply batteries for about 700,000 electric vehicles every year, a volume that can materially shift the availability of lower-cost EVs in Europe.
Stellantis plans to use these packs in its B- and C-segment models from brands such as Peugeot, Citroën, Fiat, and Opel, supporting its goal of ramping up affordable electric mobility across the continent.
Europe has struggled to match the cost structure and scale of Asian battery producers, and high rejection rates in some European plants have pushed up costs relative to competitors.
By tapping CATL’s manufacturing know-how in Spain, Stellantis aims to narrow that cost gap so that entry-level electric models can compete with combustion vehicles without heavy subsidies.
What does the Chinese workforce mean for local jobs and skills?
During construction, the project is expected to bring around 2,000 Chinese workers to Figueruelas, a town of about 1,000 residents, to help build and commission the plant.
Local executives and union leaders acknowledged that Europe lacks experience with some of the advanced battery processes, which is why CATL is sending specialists to oversee installation and early operations.
The plan is not to rely indefinitely on imported expertise, since Contemporary Star Energy expects to hire and train about 3,000 Spanish workers for long-term roles.
The company has promised comprehensive training programs and is working with unions and universities in Aragon so that local employees can learn quality control, cell manufacturing, and maintenance for sophisticated production lines.
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Is Spain becoming Europe’s next major EV battery hub?
This gigafactory is part of a broader push that has turned Spain into a rising battery and electric vehicle manufacturing hub, helped by a strong auto base and growing renewable power capacity.
Political leaders in Madrid and Aragon described the project as historic, highlighting that Spain is winning new investment while several European battery plans have been delayed or scaled back.
Spain’s lower labor costs compared with some northern European countries, combined with its competitive electricity prices, give it an advantage in energy-intensive industries like battery production.
As more plants open near existing car factories, the country could secure a central role in the European EV supply chain, from cell manufacturing to vehicle assembly and export.
What risks and opportunities define this €4.1 billion battery project?
The project arrives at a time when other European battery ventures, including Stellantis’s Automotive Cells Company partnership, have faced cost overruns, quality issues, and construction pauses in Germany and Italy.
If the Spanish plant performs to plan, it could become a template for how European automakers partner with established Asian manufacturers to scale batteries quickly and efficiently.
However, the deepening reliance on Chinese technology also raises political and regulatory questions in Brussels, especially as the European Union weighs tariffs and industrial policy aimed at strategic autonomy.
Balancing local content rules, trade tensions, and the need for rapid decarbonization will determine how far projects like Figueruelas can expand and how much they reshape Europe’s electric vehicle landscape.
In the coming years, the success of this plant will be measured not only in gigawatt-hours and vehicle output, but also in how effectively it transfers skills, anchors new suppliers, and pulls Europe closer to competitive mass-market electrification without sacrificing climate goals or industrial resilience.
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