“CALB, which is part of the top 5 largest constructors in the world for electric vehicle batteries, is the main supplier of Xpeng and, through this deal, also sees its European market reach a new potential for growth, highlighting the importance of that growth in the industrial unit that will be installed in Portugal, in Sunes municipality,” the manufacturer shared in a press release.

On July 27th, Volkswagen announced the acquisition of a 4.99% share in the Chinese Xpeng brand for 630 million euros for the joint development of electric vehicles.

Volkswagen and Xpeng want “to forge a strategic alliance of long-term and mutual benefit,” the Chinese manufacturer said in a statement sent to the Hong Kong stock exchange, where it’s registered.

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

Cited in a document shared on Wednesday, the CALB’s Administration Council president Liu Jingyu considered that as “Xpeng’s sole battery supplier,” the company “considers this new deal established between the two brands to constitute the beginning of a new cycle of growth and success for all.”

The Sines factory should be functional by 2025, with the objective of answering the company’s current order backlog on the European continent. It should be the biggest CALB factory in Europe.

The manufacturer estimates that the Sines factory has the potential to “represent circa 4% of the Portuguese GDP, as all its sales will be exported to the European market.”

In March, it was announced that CALB had begun the process of environmental licensing for the building of a Lithium Battery Unit project in Sines after having presented a Subject Definition Proposal for an Environmental Impact Study to the Portuguese Environmental Agency at the end of February.

At the beginning of July, the Agency’s president for Portugal’s External Trade and Investment (AICEP), Filipe Santos Costa, confirmed to Público that CALB had advanced with the contract to reserve 90 acres in Sines to progress with the project to install a battery factory.