Stellantis backed battery maker ACC halts plans for German, Italian plants

Stellantis and Mercedes-Benz Group‘s joint battery company has stopped construction on sites in Germany and Italy to review the business in light of slowing electric-vehicle sales and high costs.

Automotive Cells Company, or ACC, is developing three battery plants in Europe at a total cost of €7 billion ($7.6 billion), starting with a factory in northern France, where it is ramping up production. The other sites are in Termoli, Italy, and Kaiserslautern, Germany.

The company said on Tuesday it needed to research and develop low-cost batteries to supply cheaper EVs and that it would confirm its industrial and construction timeline in late 2024 or early 2025.

One possibility for the Kaiserslautern site, which is a former Opel plant, is to make low-cost lithium-iron-phosphate (LFP) cells, according to ACC CEO Yann Vincent.

The plant was to become operational by 2025, with full capacity of 40 gigawatt-hours, enough to power about 600,000 cars by 2030, and would employ 2,000 people, ACC has said. But that timeline is now in question.

Growth in Europe’s EV market has slowed significantly, with high interest rates and slashed government subsidies pushing consumers to opt for hybrids or pure combustion engine cars instead of full-electric models.European automakers are under pressure from growing exports by Chinese companies that largely use LFP batteries, significantly reducing their production costs.

Stellantis has also agreed with China’s CATL to build an LFP battery production plant in Europe.

 

Mercedes said in a statement that it was committed to ACC and that its electrification strategy remained on track. ACC is 45 percent owned by Stellantis and Mercedes holds a 30 percent stake. Saft, a battery subsidiary of France’s TotalEnergies, owns 25 percent of the company.

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