In November 2024, global battery leader CATL held a groundbreaking ceremony with automotive giant Stellantis Group in Figueruelas, Zaragoza, in Spain’s Aragon region. On December 10, both parties officially signed a joint venture agreement, announcing the formal launch of this mega-project with a total investment of €4.038 billion (approximately €4.1 billion or $4.8 billion USD), with each party holding a 50% stake, marking a significant milestone in the deep integration of China-Europe new energy supply chains.
The project, supported by over €300 million in EU funding, is expected to begin production by the end of 2026, with an annual capacity of 50GWh of lithium iron phosphate (LFP) batteries, sufficient to power approximately 750,000 electric vehicles. This factory will not only be Spain’s largest battery manufacturing base but also become a critical node for LFP battery production in Europe.
Chinese Workers Support Construction, Local Employment Gradually Increases
According to CATL’s construction plan, approximately 2,000 Chinese technical workers will participate in the factory’s construction and initial operations, training up to 4,000 Spanish local employees. A CATL spokesperson stated that the proportion of Chinese employees will gradually decrease to below 10% once production stabilizes, with the vast majority of positions filled by Spanish local staff.
At the groundbreaking ceremony in Figueruelas, Chinese Ambassador to Spain Yao Jing emphasized: “No country can develop alone.” He praised Spain as a reliable strategic partner and pledged that China would continue to share battery technology. Spanish Prime Minister Pedro Sánchez also attached great importance to this project, having previously met personally with CATL Chairman Zeng Yuqun to pave the way for the investment plan.
Currently, some Chinese machinery technicians and managers have arrived in Figueruelas to begin construction preparations. A local government spokesperson revealed that several hundred Chinese workers are expected to arrive by the end of 2024, with the number of Chinese workers reaching nearly 2,000 by the end of 2025.
Spain Attracts Battery Industry Investment with Multiple Advantages
As Europe’s second-largest auto producer, Spain is leveraging multiple advantages to position itself as a European battery industry hub. Compared to other EU member states, Spain’s labor costs and industrial electricity prices are approximately 20% lower. McKinsey research shows that Spain’s solar power generation costs are 20-25% lower than Central Europe, coupled with abundant wind energy resources, providing an ideal development environment for the energy-intensive battery industry.
Spain’s strategic geographic location is equally significant. As Europe’s southern gateway, Spain is not only close to major Western European automotive markets but also serves as an important portal to Latin American and Mediterranean markets. International automotive giants including Volkswagen, Mercedes-Benz, Audi, and Nissan all have production bases in Spain, providing a stable customer base for battery factories.
Notably, Spain abstained from EU voting on imposing additional tariffs on Chinese electric vehicles, contrasting sharply with the pro-tariff stance of countries like France and Italy. This relatively friendly policy environment is viewed as an important consideration for Chinese companies investing in Spain.
Europe’s Battery Industry Struggles Highlight Indispensability of Chinese Technology
The launch of CATL’s Spanish factory reflects the deep challenges facing Europe’s power battery industry. In recent years, multiple European domestic battery companies have encountered difficulties. Swedish battery manufacturer Northvolt filed for bankruptcy protection in November 2024. This company, once hailed as “Europe’s battery hope,” had received EU policy support and massive investments from automakers, and its bankruptcy is viewed by the industry as a major setback for Europe’s strategy to achieve “self-controlled” power batteries.
Roque Ordovás Mangirón, a Stellantis shipping manager, stated bluntly: “Before it was mostly German technology, and now it’s Chinese. What difference does it make? Here in Spain, what we offered was always labor.”
David Romeral, Director General of CAAR Aragon automotive business network, was even more direct: “We don’t know this technology, these components—we’ve never made them before. They’re years ahead of us. All we can do is watch and learn.”
European automotive industry and union representatives generally believe that in the battery technology field, technical expertise remains a huge challenge. The power battery industry is characterized by long construction cycles (typically 3-5 years from planning to production), massive upfront capital requirements (billions of euros per production line), and high technical barriers, making it difficult for European domestic companies to establish a complete supply chain system in the short term.
CATL Accelerates European Expansion, Consolidates Global Leadership
The Spanish factory is CATL’s third battery factory in Europe. Previously, the company invested approximately €1.8 billion to build its first European factory in Arnstadt, Thuringia, Germany, with an initial capacity of 14GWh, officially launched in January 2023. In Debrecen, Hungary, CATL is building its largest European battery factory with a planned capacity of 100GWh, total investment not exceeding €7.34 billion, expected to begin production in early 2026.
According to data from South Korean research institution SNE Research, in 2024, CATL’s global power battery installations reached 339.3GWh, up 31.7% year-on-year, with a market share of 37.9%. This marks CATL’s eighth consecutive year at the top of global rankings. Its installation volume exceeded the combined total of companies ranked 2nd through 5th, demonstrating absolute market leadership.
In the European market, CATL’s customers include BMW, Daimler, Stellantis, Volkswagen, Ford, Hyundai, Honda, Volvo, and many other international automakers. Entering 2025, CATL continues its strong growth momentum. According to the latest SNE Research data, from January to August 2025, CATL’s global installation volume reached 254.5GWh, up 31.9% year-on-year, with a market share of approximately 38%, continuing to firmly hold the global number one position.
Stellantis stated that CATL will be responsible for providing LFP batteries, mainly for economy electric vehicles with medium driving ranges. High-performance electric vehicles requiring ternary lithium batteries will primarily be supplied by ACC, a company jointly established by Stellantis with Mercedes-Benz and TotalEnergies. This “dual-chemistry” strategy aims to balance cost and performance requirements.
Spain’s Battery Industry Cluster Effect Emerges
CATL’s project is not an isolated case. In July 2024, Envision AESC’s battery gigafactory in Spain also began construction, expected to start production in 2026, becoming Europe’s first LFP battery gigafactory. Additionally, Volkswagen’s PowerCo and Slovak company InoBat are also planning battery factories in Valencia and Valladolid, respectively.
The Spanish government launched a €70 billion green recovery plan in 2021, focusing investment on energy transition, digitalization, and green transportation. José Juan Arceiz, secretary general of the local UGT Aragon union, stated: “As the plant ramps up, there will be more jobs for Spanish workers. This project needs to succeed, and everyone has to do their part.”
The union is communicating with CATL about skill requirements and plans to establish training programs in cooperation with local universities. It’s worth noting that CATL has accumulated localization experience in building its Debrecen, Hungary factory. That factory currently employs approximately 950 people, two-thirds of whom are local employees, although recruitment progress has been slightly below expectations, and production start-up has been delayed from late 2025 to 2026.
Future Outlook: A New Paradigm for China-Europe Industrial Cooperation
The construction of CATL’s Spanish factory is not merely a commercial project but embodies the broader trend of deep integration in the global new energy supply chain. In addressing climate change and energy transition, Europe needs to leverage China’s leading advantages in battery technology and manufacturing scale, while Chinese companies need to serve the European market better and avoid potential trade barriers through localized production.
Stellantis Group plans to achieve full net-zero carbon emissions by 2038, and this project will provide critical support for its electrification transition. Meanwhile, the EU is advancing regulatory measures such as the New Battery Law, setting higher requirements for battery carbon footprint, recycling, and local procurement, which is also prompting battery companies to accelerate their localization in Europe.
For Spain, this gigafactory will not only create thousands of direct jobs but also drive the development of upstream and downstream supporting industries, consolidating its position in the European automotive manufacturing landscape. For CATL, the layout in Spain, Germany, and Hungary will form a supply network covering major European markets, laying the foundation for long-term competition.
As factory construction progresses and production begins, this project will become an important window for observing China-Europe industrial cooperation, technology transfer, and localization processes, and will provide valuable practical experience for the development of the global new energy industry. The strong position of Chinese power battery companies in the global market is reshaping the global new energy industry landscape, and this trend continues to accelerate in 2025.
