Stellantis and Mercedes-Benz Pause Plans for EV Battery Gigafactories Amid Slowing Demand

Automotive Cells Company (ACC), a joint venture by Stellantis and Mercedes-Benz has decided to halt work on two electric vehicle (EV) battery plants in Europe.

With involvement from TotalEnergies, the ACC joint venture had initially aimed to establish three battery plants across the European Union (EU). This is followed by a total investment of around $7.6 billion by 2030. Particularly, one plant in Douvrin, France, has been operational since last year, but the status of the other two plants in Kaiserslautern, Germany, and Termoli, Italy are now uncertain according to Bloomberg.

In detail, ACC CEO Yann Vincent told Bloomberg that the demand for EVs has not met earlier projections. As a result, this has prompted actions of reevaluation of its plans with one potential adjustment that may include the production of lower-cost lithium iron phosphate (LFP) cells at the Kaiserslautern plant. This would designed to cater to the demand for more affordable EVs for the market.

Furthermore, decisions to proceed with the Kaiserslautern plant will be determined by late 2024 or early 2025 and discussions on the Termoli plant will continue through the beginning of next year.

As the pause in construction raises concerns about the joint venture’s future output of EV batteries, the ACC is still aiming to search for viable paths moving forward. With Europe experiencing a slowdown in EV demand, the developments of EV technology and manufacturing will need to be further addressed as Stellantis, Mercedes-Benz, and their partners in the ACC venture deem this as a top priority.

With the EU projecting to reach 40 million EV fleets By 2030, this setback could hinder to that. Nevertheless, many automakers are making the shift to increase their EV lineup while targeting the European market, making this projection potentially still within reach.

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