Battery choice affects EV cost

On an electric vehicle, the battery is one of the most important components, determining the performance, range, and charging time, as well as the price. The battery accounts for about 40% of the total cost of a zero-emission vehicle. This has led manufacturers to seek the cheapest options, with the Stellantis group announcing a strategic shift.

Stellantis switches to cheaper battery tech

Until now, the Franco-Italian-American company primarily used NMC (nickel-manganese-cobalt) chemistry, which offers higher energy density and a more generous range but is more expensive than LFP (lithium-iron-phosphate). The group has opted for LFP technology on its cheaper cars, such as the Citroën ë-C3 or the Fiat Grande Panda.

LFP adoption for 2027

CEO Antonio Filosa confirmed during the presentation of the group's financial results for the third quarter on Wednesday, October 28, 2026, that Stellantis plans to generalize LFP technology on a large part of its European range starting in 2027. The objective is to significantly reduce the cost of its electric cars, alongside the launch of the new multi-energy STLA One platform unveiled by the future Peugeot E-208.

Trade-offs with LFP batteries

The switch to LFP is not neutral for customers. LFP batteries have lower energy density and perform worse in cold weather, slowing down charging and reducing range in winter. However, they are more thermally stable and can tolerate daily 100% charges without wearing out faster, which is especially important for small batteries in city cars.

Competition and industry trends

The goal of this new strategy is to make substantial savings, although the exact amount has not been communicated. These savings could potentially lead to lower prices, but the group has not announced specific price reductions. The price war is intensifying, with Chinese manufacturers breaking prices on the market. Stellantis is not the only automaker to adopt LFP technology; Volkswagen is also accelerating its use by strengthening its partnership with the Chinese company Gotion. Renault has already used LFP batteries in models such as the Twingo, R5, Mégane, and Scénic.

First LFP-powered Stellantis model

The electric Fiat 500 will be the first Stellantis model to use LFP batteries, as announced by Emanuele Cappellano, CEO of Stellantis in Europe, in mid-July. Sold from 23,900 euros in France with 190 km of range, the city car is expected to see its starting price drop in 2027 due to the cheaper battery. However, the group has not provided any specific figures.

LFP battery plant in Spain

"Many models" will have these LFP batteries starting in 2027, but Antonio Filosa did not specify which ones. This will certainly be the case for the future Peugeot e-208, which will be the first in 2027 to be based on the new STLA One platform. To power this new platform, Stellantis is building an LFP battery plant in Spain, co-owned with the Chinese company CATL in Zaragoza, with production expected to start by the end of 2026 and a long-term capacity of 50 GWh per year.

Financials and price strategy

During this presentation, Antonio Filosa did not announce any price reductions for customers. The European branch of Stellantis lost 311 million euros in operating income in the third quarter of 2026, despite a 10% increase in deliveries. The savings made on the batteries could therefore first be used to restore margins. The price of the Fiat 500e with LFP battery, expected in 2027, will give the first answer.