Stellantis (STLA) plans to build an additional European electric vehicle battery factory through a partnership with Chinese battery maker CATL. The plant would produce CATL’s low-cost lithium iron phosphate (LFP) batteries to power Stellantis EVs.
Yahoo Finance’s autos reporter Pras Subramanian discusses automakers’ push towards localizing EV production, providing insights into Stellantis’ affordable offerings anticipated to debut in the European market.
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SEANA SMITH: Stellantis is looking to extend its foothold in the EV space. The company behind global brands including Fiat and Jeep planning to build another European-based EV battery plant, this time, with China’s CATL. It’s a signal of closer ties between the automaker and the world’s second largest economy.
Joining us now “Yahoo Finance’s” Pras Subramanian. Pras, what do you think the significance of this is?
PRAS SUBRAMANIAN: Well, it’s just Stellantis lining up their supply chain in Europe. Obviously, they’re a multinational company. They have big operations in Europe. Signing up with China’s CATL is another step towards that cementing that relationship. CATL known for making these cheaper LFP batteries. They have more durability, but less range than NMC batteries. But they’re cheaper. And you can make cheaper cars there. So the plan there with CATL is they might actually make a joint venture there with them, provide those batteries for local supply, i.e. the European market.
Stellantis is planning to make a 25,000 euro Fiat for the future in Europe, as well as a Citroen C3 EV, a car on that same price, for both Europe and the US. Like I said, now, for multinationals like Stellantis, this is a local supply is great for their for their for their footprint there in Europe. But they can’t avail themselves to the large EV battery credits that manufacturers in the US are getting.
BRAD SMITH: Pras, in the year that’s been really just encapsulated by the labor negotiations for a lot of the big three automakers here in the US, it seems like one of the next big steps in 2024 might trickle down to the supply network. And perhaps, this is where that is kicking off, especially, in the different regions, where all of these automakers want to be able to take product into or, at least, produce and deliver product. And correct me, if I’m wrong there.
PRAS SUBRAMANIAN: I think what you’re saying is that they want to source and build these things locally to make them cheaper, to transport them. It’s more cost efficient. It’s better for the environment, if you have these materials in a local region. And you’re able to produce those cars there.
Also, Brad, there was a report from Goldman this week about how battery prices are coming down tremendously, especially, in the anode side, which is the side with the lithium on it. They’re saying that prices may drop 40% from 2022 to 2025, which is a massive productivity and materials gain there. So you might even see these cheaper cars localized, but also even coming out faster than we think the $25,000 EV, which seemed like a pipe dream unrealistic, it might actually happen in three years time or so. And it might actually be the case that the companies can make them affordably.
BRAD SMITH: Yeah. Look, I tried to heed the call from Elon Musk and start refining and mining lithium. But I have a degree in marketing, unfortunately. Pras, thanks so much for joining–
PRAS SUBRAMANIAN: I heard the Gowanus Canal is great for that.
BRAD SMITH: Oh, yeah. You probably go out to the bay. You don’t even have to go to Gowanus for that one. Thanks so much, Pras. Appreciate it.