Stellantis (STLA) and Chinese battery giant CATL announced plans on Tuesday to build a large-scale lithium iron phosphate (LFP) battery plant in Spain valued at 4.1 billion euros ($4.3 billion). The joint venture, a 50:50 partnership, aims for a production capacity of up to 50 gigawatt-hours, contingent on market demand and government support.
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STLA Has Chosen a Strategic Location for the Battery Plant
The facility will be located at Stellantis’ Zaragoza site in northeastern Spain, with operations expected to begin by the end of 2026. Additionally, Stellantis stated that the plant will enhance its “best-in-class” LFP capabilities in Europe, enabling the production of more high-quality, affordable battery-electric cars and SUVs.
In November of last year, Stellantis and CATL signed a non-binding memorandum of understanding for the local supply of LFP battery cells and modules for EV production in Europe.
Return of Kuniskis Likely to Help STLA
Meanwhile, Stellantis has faced challenges following the sudden departure of CEO Carlos Tavares amid declining sales. However, the return of Tim Kuniskis to lead the Ram Trucks brand as CEO has boosted investor confidence in the stock.
According to a CNBC report, Tavares’ “arrogant” missteps contributed to his exit. Former and current U.S. leaders at the company cited issues such as his focus on cost-cutting, his goal of achieving double-digit profit margins under “Dare Forward 2030,” and his reluctance to consider U.S. executives’ input on the American market.
Is STLA a Good Stock to Buy?
Analysts remain cautiously optimistic about STLA stock, with a Moderate Buy consensus rating based on seven Buys, 10 Holds, and two Sells. Over the past year, STLA has plunged by more than 30%, and the average STLA price target of $14.88 implies an upside potential of 8.4% from current levels.
