(Yicai) Nov. 21 -- Chinese battery giant Contemporary Amperex Technology has reached a preliminary agreement with Stellantis to supply lithium iron phosphate batteries to the European carmaker in the local market.

Stellantis and CATL signed a memorandum of understanding for the local supply of LFP battery cells and modules to power the former's electric vehicle production in Europe, according to a statement released by Stellantis today.

The unbinding deal outlines their cooperation on two fronts, building a technology roadmap to support Stellantis' battery EVs and identifying opportunities to further strengthen the battery value chain, the automaker added, noting that the pair is also considering the possibility of forming a joint venture with equivalent contributions.

"This MoU with CATL on LFP battery chemistry is another ingredient in our long-term strategy to protect freedom of mobility for the European middle class," Stellantis' Chief Executive Officer Carlos Tavares said.

"We are very pleased to evaluate our cooperation with Stellantis to a new level," said Robin Zheng, chairman and general manager of CATL. "With Stellantis' time-honored expertise in car manufacturing and CATL's advanced battery technology, we believe the partnership will be a decisive step on both parties' journey towards carbon neutrality goals.

"We will remain dedicated to delivering more competitive and sustainable solutions for our partners to promote global energy transition," Zheng noted.

Featuring a long service life and high thermal stability, LFP technology can enable Stellantis to offer high-quality, durable, and affordable EVs in passenger cars, crossovers, and sports utility vehicles in the B and C segments, the automaker pointed out.

As part of the Dare Forward 2030 strategic plan, Stellantis announced plans of reaching a 100 percent passenger car battery electric vehicle sales mix in Europe and a 50 percent passenger car and light-duty truck BEV sales mix in the United States by 2030, Stellantis said, adding that it also set the goal of carbon net zero by 2038.

In the first five months of the year, CATL achieved a share of the overseas power battery market of 27.3 percent, an increase of 6.9 percentage points from a year earlier. The Ningde-based company's overseas revenue reached CNY67.2 billion (USD9.4 billion) in the first half of the year, accounting for nearly 36 percent of the total.

Europe has become the world's second-largest new energy vehicle market after China. CATL opened a branch in Germany in 2014, which now has advantages in localized production, research, development, marketing, and services.

China's NEV sales surged 44 percent to 3.7 million units in the first half from a year earlier, achieving a market share of 28.3 percent, according to the China Association of Automobile Manufacturers. Thirty-one European countries registered 1.4 million new energy passenger cars, up 27 percent in the period and reaching a market share of 21.5 percent, according to the European Automobile Manufacturers' Association.

Editor: Futura Costaglione