The moment where several memoranda of understanding were signed between China and Portugal during Xi Jin Ping's visit to this country ( Image: Lusa
The moment where several memoranda of understanding were signed between China and Portugal during Xi Jin Ping's visit to this country ( Image: Lusa

China lithium battery producer ‘in Sines’ welcomes VW-Xpeng deal 

China Aviation Lithium Battery Technology focused on developing European market

CALB – standing for China Aviation Lithium Battery Technology (CALB) – appears to have changed its tune since last month when it was ostensibly ‘reconsidering’ its plan to build a mega lithium battery factory in Sines.

According to a report this week by Lusa, the company is already a ‘lithium battery producer in Sines’ – and what’s more it is welcoming an agreement “signed between car manufacturers Xpeng and Volkswagen, considering it to be “an opportunity”.

“CALB, which is in the top five of the world’s largest manufacturers of batteries for electric cars, is Xpeng’s main supplier and, through this agreement, also sees its European market reach new growth potential, highlighting its importance for the industrial unit that is to be set up in Portugal, in the municipality of Sines,” a statement by the Chinese manufacturer said yesterday.

Volkswagen recently announced a €630 million acquisition of a 4.99% stake in Xpeng for the joint development of electric vehicles, explains Lusa.

The two manufacturers want to “forge a long-term and mutually beneficial strategic alliance”, said Xpeng in a statement sent to the Hong Kong stock exchange, where it is listed.

The document indicated that the brands will jointly develop two electric models for the Chinese market, which should begin production in 2026.

Quoted in the document released yesterday, chairman of CALB’s Board of Directors, Liu Jingyu, said that as “Xpeng’s sole battery supplier“, his company “considers the agreement between the two brands to be the start of a new cycle of growth and success for everyone”.

The factory in Sines is due to come into operation in 2025, with the aim of responding to the company’s current order book on the European continent – and should be CALB’s largest factory in Europe.

The manufacturer estimates that the operation of the plant in Sines could “represent around 4% of Portugal’s Gross Domestic Product (GDP), since all sales will be exports to the European market”.

In March, it was reported that CALB had started the environmental licensing process for the project to build the lithium battery plant in Sines, after submitting a proposal to define the scope of the environmental impact study to the Portuguese Environment Agency (APA) at the end of February, writes Lusa.

“At the beginning of July, the head of Portugal’s Agency for Investment and Foreign Trade (AICEP), Filipe Santos Costa, told Público newspaper that CALB had gone ahead with a contract to reserve 90 hectares in Sines in order to proceed with the project to set up the battery factory”.

At roughly the same time however, Jornal Económico, suggested the whole project was at risk, potentially in retaliation to Portugal’s stance over Chinese technology in 5G networks, and also due to the problems CALB itself has been facing in China.

Fast-forward to this month, and international media has been reporting on how China has entered deflation, which may have helped tip the balance back towards CALB’s apparent intentions for Sines.

Lusa’s report has made no mention of the story about Chinese electric vehicles in the UK media recently, where fears have been raised that they could be used to ‘spy on British citizens.

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