Stellantis has issued a series of strategic announcements in recent weeks, underscoring its intent to solidify its position in the evolving automotive landscape. The focus of these announcements lies in securing future battery supply through agreements with CATL and Zeta Energy, alongside a conditional loan from the US Department of Energy (DoE) for a battery facility in collaboration with Samsung SDI. Additionally, Stellantis has rejoined the European Automobile Manufacturers’ Association (ACEA) after its departure in 2022. These developments reflect the group’s strategy to navigate a challenging market environment and align with broader industry trends.

LFP production in Europe

Stellantis and CATL have announced a joint venture to construct a gigafactory in Zaragoza, Spain, dedicated to LFP batteries. With an estimated investment of up to EUR4.1 billion (USD4.3 billion), the facility is targeted to commence production by the end of 2026, aiming for a capacity of up to 50GWh. This joint venture follows a memorandum of understanding (MoU) signed between the companies in November 2023 and takes place against a backdrop of slower than expected EV growth in Europe this year, coupled with cancellations of other gigafactory projects.

The agreement also contrasts with delays from ACC, another Stellantis joint venture, in rolling out gigafactories across Europe due to uncertainties in market dynamics and cell chemistries.

In another significant move, Stellantis has rejoined ACEA. This follows ACEA’s recent appeal to delay 2025 CO2 emissions targets, citing the risk of fines for many OEMs failing to meet the stringent benchmarks. However, Rho Motion analysis shows that Stellantis is near to reaching its 2025 target, with the group recently reporting it expects to hit next year’s target.

Expansion of battery facilities in the US

Across the Atlantic, StarPlus Energy, a joint venture between Stellantis and Samsung SDI, secured a conditional commitment from the DoE for a USD7.54 billion loan. The funding will support the construction of two gigafactories in Indiana, which are expected to deliver a combined production capacity of approximately 67GWh upon completion.

In parallel, Stellantis has signed an agreement with Zeta Energy, a developer of lithium-sulphur batteries, to explore the technology’s potential and establish production capacity by 2030. The company highlighted lithium-sulphur’s advantages, including lighter battery packs for extended range and costs reported to be less than half of current lithium-ion technology on a per-kilowatt-hour basis.

Read: Are lithium-sulphur batteries becoming a reality?

Announcements in context of Stellantis’ current market position

These announcements arrive as Stellantis faces declining EV sales. Year to date (Jan-Oct) its global EV sales have dropped by 20% year-on-year, with a 26% decline in Europe and a 6% decline in North America. Job cuts have compounded the group’s challenges, including reductions at US facilities such as a Detroit parts plant (400 jobs), the RAM plant in Michigan (1,100 jobs), and a Cherokee production facility (250 jobs). Meanwhile, operations at Italian Fiat plants have been paused, and the Vauxhall facility in Luton, UK, is slated for closure, affecting 1,100 jobs.

Read: Automakers feeling the squeeze on profits, is electrification taking its toll?

Despite these headwinds, Stellantis remains committed to its electrification strategy, targeting 100% BEV/PHEV sales in Europe and 50% in the US by 2030. This contrasts with several legacy automakers that have recently scaled back their electrification ambitions.

By doubling down on investments in battery technology and production facilities, Stellantis signals its commitment to the EV market. While near term challenges persist, these strategic moves aim to ensure the group remains competitive.

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