Major investments from Chinese battery giants, CATL and Gotion sees them double down on European investment in a boost to Europe’s battery hopes.

On 10 December, CATL announced a joint venture (JV) with Stellantis to invest up to EUR4.1Bn (US$4.3Bn) in an LFP battery manufacturing facility at Stellantis’ Zaragoza, Spain site. Production is planned to start at the facility by the end of 2026 and its capacity could reach 50GWh, although this is said to be dependent on market conditions.

Following this, Gotion announced on 13 December that it will spend up to EUR2.1Bn (US$2.2Bn) for two battery manufacturing facilities in Slovakia and Morocco. Both facilities are each expected to begin operation with 20GWh of battery production capacity and with a view to expand to 60GWh at a later date, depending on market conditions.

These announcements are a positive boost to Europe’s battery ambitions, which have remained subdued since Northvolt’s bankruptcy filing in November. The investment also brings additional hope in securing low-cost LFP cells from domestic sources, which are required for the entry-level electric vehicle (EV) market. China dominates the LFP supply chain, from upstream raw materials through to cell production. Although the cathode active material (CAM) for these facilities will still inevitably be imported from China in the near term, these announcements represent an important step to establish LFP production in Europe.

These investment decisions also align with the EU’s recent call for greater technology transfer from China to Europe. Although the decision-making for these facilities would have been evaluated over months of negotiation, the decision to directly invest in EU-based projects is a step that will be welcomed by the EU. If implemented effectively, this technology transfer strategy could play well for Europe in an effort to combat protectionism and to strengthen its battery supply outlook