Stellantis to switch 'many' nameplates to LFP batteries to reduce costs in Europe

Speaking during the company's Q3 2026 results call, Stellantis CEO Antonio Filosa revealed that from 2027, the battery chemistry in "many" of Stellantis' European nameplates will be switched from nickel manganese cobalt (NMC) cells to lithium iron phosphate (LFP) ones.

Filosa did not specify which nameplates would be affected by the switch, nor did he quantify the expected savings. He described the change as one of two "very important competitive moves" planned for 2027 and said it would deliver "substantial" savings in battery costs.

Competition, demand and cost pressures

Stellantis' announcement cannot be separated from the context in which it was made. The decision comes as the company faces pressure from Chinese competition, a challenging pricing environment, growing battery electric vehicle (BEV) demand and continued profitability concerns in Europe.

Read more: UK and EU automotive leaders urge policymakers to "level the playing field" with Chinese OEMs

Chinese OEMs' market share of new vehicle sales in Europe has grown rapidly in recent years, prompting UK and EU policy debates to ensure fair competition.

Speaking during the Q3 results call, Filosa described the European market as "challenging", citing ongoing competition from Chinese automakers and difficult pricing conditions. Despite this, he said Stellantis continued to grow in the region, supported by strong demand for models based on its Smart Car platform and surging demand for BEVs, particularly in France, Germany and the UK.

In Q3 this year, Stellantis' EU30 passenger BEV sales increased 65% year-on-year, or 93% when including Leapmotor, while BEV light commercial BEV sales rose 46%.

However, higher BEV sales have also presented a profitability challenge for Stellantis. The company's adjusted operating loss in the Enlarged Europe region reached €311 million ($348m) in Q3 2026, a deterioration of €468m ($524m) compared with the same period last year.

Joao Laranjo, Stellantis' chief financial officer, said that despite higher volumes and continued industrial cost savings, regional profitability had been affected by an unfavourable sales mix, reflecting higher BEV sales alongside persistent pricing pressure.

Filosa also pointed to the pace of electrification in Europe, which he said was accelerating in response to higher oil prices and regulation. He argued that further regulatory changes were needed to create a level playing field for automakers, specifically calling for greater flexibility around CO₂ emissions requirements for passenger cars and light commercial vehicles, alongside the proposed 'Made in Europe' framework. He also identified the rise in raw material and memory chip costs as industry-wide pressures, saying manufacturers would need to address these through pricing and cost containment measures.

Against this backdrop, the planned switch from NMC to LFP cells in several Stellantis nameplates forms part of the company's wider effort to improve the cost competitiveness of its European line-up as BEV demand grows.

Stellantis' existing LFP investment

Read more: Stellantis and CATL break ground on LFP gigafactory in Spain

Stellantis’ 50:50 joint venture with battery maker CATL – Contemporary Star Energy – has broken ground on a 50 GWh lithium phosphate battery (LFP) gigafactory in Zaragoza, Spain, next to Stellantis’ assembly plant there.

In December 2024, Stellantis entered into a joint venture with Chinese battery manufacturer CATL to construct and operate a €4.1 billion ($4.3bn) large-scale LFP battery plant at Stellantis' existing site in Zaragoza, Spain.

The two partners broke ground at the site in November 2025. The plant was initially expected to be operational by the end of 2026, although Spanish news agency EFE reported earlier this year that the site is likely to begin production in 2027.

As well as localising its battery supply chain, the investment in the plant and in the diversification of its BEV battery chemistry was designed to enable Stellantis to bring more competitive, affordable BEVs to the European market.

The decision is in line with the company's 'Dare Forward 2030' strategy, which aims to make electric mobility more accessible and affordable while accelerating its transition towards an all-electric vehicle portfolio.

“Stellantis is committed to a decarbonised future, embracing all available advanced battery technologies to bring competitive electric vehicle products to our customers,” said Stellantis chairman John Elkann at the time of the announcement. "This important joint venture with our partner CATL will bring innovative battery production to a manufacturing site that is already a leader in clean and renewable energy, helping drive a 360-degree sustainable approach."

A spokesperson for Contemporary Star Energy – Stellantis and CATL's joint venture – described the LFP cells that will be produced in Zaragoza as complementary to the NMC batteries produced by Automotive Cells Company (ACC) – the joint venture between Stellantis – TotalEnergies and Mercedes-Benz, at its gigafactory in Douvrin, France.

Stellantis also invested €40m ($44.8m) in its first Battery Technology Center, at its Mirafiori complex in Turin, Italy. Opened in 2023, the 8,000 sq. m facility enhances the company's capabilities to design, develop and test battery packs, modules, high-voltage cells and software. It was described by Stellantis as the largest of its kind in Italy and amongst the largest in Europe.

The centre's cell testing facilities are intended to screen innovative battery chemistries, supporting Stellantis' wider dual-chemistry strategy. The company said this approach was designed to serve different customer requirements while improving cost competitiveness.

What does Stellantis' dual-chemistry approach mean for its supply chain?

Although Filosa has suggested "many" nameplates will make the switch to LFP, it is worth noting that not all nameplates will be affected. Stellantis will continue to pursue its dual-chemistry strategy, at least for now, albeit with a greater focus on LFP cells.

One potential benefit of this approach is reduced exposure to individual raw materials and their associated supply risks. NMC and LFP batteries use different combinations of materials, meaning that a greater use of LFP can reduce Stellantis' reliance on certain materials required for nickel-based chemistries.

Cobalt, for example, is used in NMC batteries but not in LFP cells. According to the International Energy Agency's Global Critical Minerals Outlook 2026, cobalt prices in 2025 and early 2026 rose by around 130%, largely due to export restrictions imposed by the Democratic Republic of the Congo (DRC).

This is one example of how changes in raw material availability and prices can affect battery costs. Maintaining access to both chemistries could give the company greater flexibility in managing its battery sourcing and exposure to individual materials.

Using LFP batteries in more nameplates will, of course, mean Stellantis must ensure that its suppliers can provide sufficient quantities of the materials and components required, while its logistics providers must be able to accommodate the resulting changes in sourcing and material flows. Scaling up LFP supply efficiently will be important to avoiding bottlenecks and ensuring that the cost benefits of the switch can be fully realised.

Stellantis' LFP battery plant in Zaragoza could play a significant role in supporting this scale-up when it begins production. With planned annual capacity of up to 50GWh, the plant is set to supply LFP batteries for electric vehicles in the B, B SUV and C segments, as well as potentially for a light commercial vehicle (LCV). However, with Stellantis yet to confirm the specific nameplates affected by the planned chemistry change, the full extent of the plant's role in the transition remains to be seen.