Stellantis and Chinese battery-making giant CATL have signed a memorandum of understanding to produce lithium-iron-phosphate (LFP) batteries for electric cars in Europe.
The two firms are considering a 50:50 joint venture for a European battery plant, but decisions on the size or location of any such factory have yet to be made.
They will also work to develop a long-term strategy for Stellantis’s EV technologies and to strengthen its battery supply chain in Europe.
Stellantis CEO Carlos Tavares called the agreement “another ingredient in our long-term strategy to protect freedom of mobility for the European middle class”, hinting that local production of LFP batteries would help to improve the affordability of the firm’s electric models.
Stellantis will launch several low-cost electric cars in Europe in the coming years, including the recently unveiled Citroën ë-C3 – priced from €23,300 (roughly £20,350) – and a new-generation Fiat Panda.
Tavares added: “CATL is the industry leader in this sector and together with our iconic vehicle brands, we will bring innovative and accessible battery technology to our customers while helping us achieve our carbon net zero ambition by 2038.”
LFP batteries have gained much traction in recent years for their lower cost compared with the dominant nickel-manganese-cobalt (NMC) chemistry. LFP cells are less expensive in large part because they use iron, one of the most common elements on Earth.
However, they are less energy dense than NMC cells, forcing a trade-off between an electric vehicle’s range and mass.
Nonetheless, several manufacturers have adopted the technology for entry-level variants of their electric models, including Ford, Tesla and Volkswagen – with VW set to use LFP for a series of upcoming entry-level electric cars.
BYD is also a major proponent of LFP batteries and uses them in the Atto 3 crossover, Dolphin hatchback and Seal saloon, among other models.
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