It started as a distant possibility, a rumor that might take years to materialize. Yet today the idea of Stellantis building a gigafactory in the Iberian Peninsula feels tangible. Reports from the Prensa Ibérica group, relayed by FARO, indicate that during a visit to the Mangualde plant the group’s CEO, Carlos Tavares, confirmed the project is moving through the planning stage and a decision is expected by year’s end. The scene unfolded with the Portuguese prime minister, António Costa, present, while negotiations were described as a competition between Portugal and Spain. The objective is clear: secure the best terms by comparing renewable energy availability, overall costs, and government backing. Both sides have signaled they will present their labor and industrial strategies to attract the investment, emphasizing low energy costs, green power, and a broad set of incentives. In this context, Spanish assets such as a dedicated production line for these plants, highlighted in the second Perte VEC call for Electric and Connected Vehicles, and proximity to the group’s main Iberian factories in Vigo and Zaragoza, could be reactivated.
Although several proposals are circulating, there is currently a factory project of this magnitude under development or planned in every country. In Portugal, CALB, the China Aviation Lithium Battery Technology company, signed a memorandum of understanding to establish a giant battery factory on Portuguese soil. Sines has emerged as the favored site, where the company has already filed for an environmental permit. On the Spanish side, the Perte VEC program’s first call secured support for Volkswagen and its subsidiary PowerCo, which will set up in Sagunt, Valencia.
Huge battery factories are shaping the Iberian Peninsula landscape.
Options on both sides of the border could appeal to Stellantis. The steering point is a strategic reserve of lithium and other critical metals used in modern batteries, deposits found in northern Portugal and Extremadura. Feasibility studies are already underway in both regions to utilize these resources and even expand the resource base as needed.
The two nations are also prominent producers of renewable energy, a factor Tavares flagged as crucial in site selection. Both countries are building their offshore wind and solar capacities, while energy trade remains active across the border. In this context, Spain shows a favorable balance in power flows: recent figures show higher exports from Spain to Portugal compared with imports, reflecting the evolving energy landscape.
Cost considerations are a major differentiator. Portugal’s industrial area is extensive and, in many cases, offers competitive pricing that can outpace certain regions of Spain. Labor costs also play a significant role. The Portuguese minimum wage sits around seven hundred sixty euros, a gap of roughly three hundred euros below Spain’s levels. For instance, last year the average monthly wage in Pontevedra was about seventeen hundred thirty euros, while the five Portuguese border municipalities averaged around eight hundred sixty-two euros. Tavares pointed out that Portugal presents more competitive labor costs, which could influence investment decisions.
It remains unclear what government incentives Portugal can provide. Spain has activated the second Perte VEC call to support battery factories, but challenges exist. The project landscape includes competing bids from China’s Extremadura initiative with Acciona, and India’s Tata Motors planning to participate in Zaragoza, as well as other players like Inobat in Valladolid. The alignment of Stellantis’s timeline with public funding cycles remains a key factor as the year progresses toward decision time for Perte and other support mechanisms.
Industry observers note that the announcement from Mangualde appeared to surprise executives in Spain, underscoring the unpredictable nature of large-scale industrial planning in the region.
Costa urges Portuguese employers to raise wages, citing growth as a path to broader prosperity. Portuguese Prime Minister António Costa addressed a conference in Lisbon, calling on businesses to actively increase wages as a driver of economic expansion. He emphasized that wage growth feeds the economy and that the government cannot shoulder the entire burden alone. Local media quoted reports noting that while civil servant pay rises require careful management, private enterprises should also pursue revenue growth through higher wages.
Costa acknowledged the inflationary pressures and weakened income growth as the greatest threats to the economy’s trajectory. In response to concerns about labor shortages, he urged companies to reconsider working hours and to pursue more balanced work-life arrangements. Workers’ concerns about housing affordability were also highlighted amid a broader debate on democracy and social policy. The labor landscape in Portugal remains dynamic as inflation figures trend around high single digits, with regional protests echoing the call for affordable housing and fair wages.
The dialogue around European industrial strategy continues to revolve around energy costs, access to critical minerals, and the capacity to attract major battery manufacturing. As the Iberian Peninsula weighs competing propositions, the next steps will hinge on what arrangements can be struck with national governments, what terms suppliers and energy providers can offer, and how the evolving Perte programs align with Stellantis’s strategic needs. Stakeholders on both sides of the border will watch closely as year-end decisions approach, with hopes that a decisive move could anchor a new era of battery manufacturing in the region.