The European dream of a battery production powerhouse lies in smithereens after Automotive Cells Company (ACC), the joint venture between Stellantis, Mercedes-Benz, and TotalEnergies, confirmed it is abandoning two of its flagship factory projects in Italy and Germany. What was once hailed as the continent’s ‘Airbus of batteries’ now hinges on a single plant in northern France. But it’s also struggling.
The plug has been pulled on two of Europe’s most ambitious battery factory projects after ACC announced the definitive abandonment of its planned sites in Termoli, Italy, and Kaiserslautern, Germany. The decision now leaves only one operational facility in France and casts serious doubts on Europe’s ability to build a sovereign battery supply chain.
All focus on Douvrin
ACC confirmed over the weekend that the conditions to relaunch the projects “have not been met”, following months of uncertainty. The cancellation follows a pause initiated eight months ago due to high costs and unfavorable market conditions.
While talks are ongoing with trade unions to wind down the sites, the Italian metalworkers’ union UILM said it was told the decision was final. German worker representatives have also been informed. The news came as confirmation in Italy, where speculation had been swirling persistently for months.
The company will now focus all its efforts on Douvrin, the facility in northern France that was meant to be the first of three European gigafactories capable of producing 120 GWh of battery cells annually by 2030. That ambition has since crumbled.
The site is plagued by production delays. It suffers from a high rate of defective battery cells, and is operating well below expectations: instead of manufacturing 1,000 cells per day, it has only reached that number since the start in 2023. Reportedly, a squad of Chinese engineers has been flown in to solve the manufacturing crisis.
Over-optimism
The withdrawal from Italy and Germany raises urgent questions. Stellantis, the project’s largest customer and backer of ACC, announced last week €22 billion in write-downs, citing over-optimism about EV uptake.
Under its new CEO, Antonio Filosa, the group has thoroughly revised the electric-first strategy implemented by Tavares and will place greater emphasis on combustion-engine technology. Filosa has hinted at a broader overhaul of the group’s EV supply chain, with further clarity expected in May when a revised strategic plan is unveiled.
Aside from Northvolt, ACC began as a vision for a European battery giant. It was heavily subsidised with €1.3 billion in public funds from France, Germany, and Italy, but is now, just like its Scandinavian counterpart, struggling to remain viable. Even with future EU support from the €1.5 billion Battery Booster program, there is no clarity on how funds will be allocated or when they will arrive.
Eight month delay
The timing couldn’t be worse. As Chinese manufacturers gain ground in the European market, local suppliers like ACC are falling behind. It has led to eight-month delays for models such as the Peugeot 3008 and the Opel Grandland, which rely on the Douvrin factory for their cells.
Stellantis has renewed its ties with lower-cost, more reliable Chinese suppliers to keep its battery pipeline filled. So, it seems that the promise of European battery independence remains just that: a promise.
