by Giulio Piovaccari

MILAN (Reuters) – Stellantis plans to build a new gigafactory in Europe to produce more affordable lithium iron phosphate (LFP) batteries as part of a possible joint venture with China’s CATL, the company announced on Tuesday. director of purchasing and supply of the automobile manufacturer.

The group formed from the merger between PSA and FCA and the Chinese battery supplier announced earlier Tuesday that they had signed a non-binding agreement for the local supply of LFP battery cells and modules intended for the production of electric vehicles in the Franco-Italian automobile manufacturer in Europe.

They also announced that they were considering the creation of an equal joint venture. Asked about the choice of the European site for the new gigafactory, Maxime Picat refused to comment.

Stellantis is already planning several battery gigafactories in Europe, the first of which will enter production this year in the North of France. This site produces another technology, nickel manganese cobalt (NMC), intended for more expensive vehicles with a longer battery life.

Financial details of the agreement between Stellantis and CATL were not disclosed.

“This partnership between our iconic brands and CATL, an industry leader in this sector, will enable us to deliver innovative and accessible battery technology to our customers while helping us achieve carbon neutrality by 2038,” said the general director of Stellantis Carlos Tavares, quoted in the press release.

Thanks to LFP technology, Stellantis will be able to offer a new electric Citroën C3 next year from 23,300 euros.

(Report by Giulio Piovaccari; Gaëlle Sheehan, with Gilles Guillaume in Paris, edited by Blandine Hénault and Kate Entringer)

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