This article first appeared on GuruFocus.
Spain just fired a shot across Europe’s industrial landscape, and the echo could be loud. Stellantis (NYSE:STLA) and China’s CATL have broken ground on a 4.1 billion battery plant in northern Spain, a project that could be seen as Europe leaning on Beijing even as policymakers try to counter China’s reach. Madrid is treating it as a win: Prime Minister Pedro Sanchez’s government welcomed the investment despite criticism over CATL’s plan to rely on its own staff during the build-out. For investors, the move could be a sign that Europe’s energy transition still runs through Chinese technology, whether politicians like it or not.
Spain’s Industry Minister Jordi Hereu framed the Figueruelas factory as a catalyst for Europe’s re-industrialization, saying it could be the best contribution Spain makes to the continent’s manufacturing revival. The venture itself is navigating controversy after reports that roughly 2,000 Chinese workers could be deployed to build and equip the plant. Andy Wu, who leads the joint venture, said subcontractor details remain in progress and emphasized a plan to hire strong local talent, while a spokesman added that hundreds of workers from China will arrive first and remain for one to two years to train local teams. Production could start by the end of next year, rising to 30 percent of capacity by 2028 and ultimately nearly 4,000 employees and about 50 gigawatt-hours of output by 2030.
Europe’s broader battery race offers a stark contrast. Despite billions of euros in backing, projects like Britishvolt in the UK and Northvolt in Sweden have gone insolvent, while Automotive Cells Co. and Volkswagen’s PowerCo have scaled back plans amid softer EV demand. CATL, meanwhile, keeps expanding, including a Hungarian facility designed to produce several battery types. Contemporary Star Energy, the Stellantis-CATL venture, is contributing about 94 percent of the funding for the Spain site. China’s ambassador to Spain, Yao Jing, said Beijing will maintain its commitment to sharing technology, while Hereu suggested the partnership could be an early step toward a version of European strategic autonomy that remains open to cooperation with countries like China.