Stellantis and Chinese battery maker CATL will invest 4.1 billion euros ($4.33 billion) to build one of Europe's largest electric vehicle battery factories in Spain, encouraged by lower costs and government funding.

China's Contemporary Amperex Technology (CATL), the largest maker of batteries for electric vehicles (EVs), is building its third plant in Europe through a joint venture with Fiat owner Stellantis, stepping up its overseas expansion to overcome higher tariffs.

Stellantis and CATL have announced plans to jointly build a 4.1 billion euro ($4.3 billion) lithium iron phosphate battery plant in Spain.