Chinese battery manufacturer and technology company Contemporary Amperex Technology Company (CATL) and Netherlands-headquartered automotive manufacturer Stellantis announced on Tuesday a Memorandum of Understanding for the joint development of a cutting edge technological road map and supply of lithium iron phosphate (LFP) batteries for the European market.
The non- binding MoU details a long-term partnership between the companies who are considering a joint venture for a European battery plant – although no decision has yet been made on the location or size of the proposed plant. The companies aim to develop Stellantis’s EV technologies to meet its Dare Forward electrification targets and strengthen its battery supply chain within Europe.
The firms are exploring possibilities to build lower cost EV batteries to increase affordability for the European market. This deepens the reliance on Chinese battery technology: a move that reflects the pressure on Stellantis to improve affordability of their EVs, as the automaker’s CEO has in the past warned of the risk to Western car makers of reliance on Chinese brands and technology. The vehicles would be passenger car crossover and small to medium-sized SUVs according to the company.
LFP is a cheaper and more stable and durable technology than the nickel, manganese cobalt (NMC) batteries Stellantis are currently using in Europe; although LFPs do have lower energy density and that reduces power and range. For the higher end of the market Stellantis is still planning to source NMC from ACA (a joint venture with Mercedes Benz and energy group Total Energies) and is already building three gigafactories – in France, Germany and Italy.
CATL supplies its LFP batteries to other car makers including Ford, Tesla, Volkswagen and Hyundai.
Discussions are intended to continue over several months regarding the joint investment to finalise details.
