STORY: A major new factory for building electric vehicle batteries is coming to northern Spain.

That was the announcement from auto giant Stellantis and Chinese battery maker CATL Tuesday (Dec 10).

The firms said they will invest $4.33 billion in the facility in Zaragoza.

They added the 50-50 joint venture is expected to start production by the end of 2026.

Europe wants to attract EV battery makers to build factories in the region.

It is trying to cut reliance on Asia and win a green subsidies race with the U.S.

The decision to award the factory to Spain comes after it abstained on imposing additional tariffs on Chinese EV imports to the EU.

Prime Minister Pedro Sanchez urged the EU to reconsider penalizing Chinese-made EVs to avoid a trade war.

He also met CATL CEO Robin Zeng this week.

Chinese companies have to seek approval from Beijing for direct investments overseas.

Reuters reported in October that China has privately told automakers to halt big investments in European countries that support imposing extra tariffs.

Spain is Europe's second-largest car producer.

In 2020, it announced a 5-billion-euro plan to attract EV and battery production using EU pandemic relief funds.