Stellantis, a major automotive manufacturer, is facing a significant setback in its plans to establish battery gigafactories across Europe. The company was initially set to receive approximately USD 223 million in European Union (EU) funding for its battery joint venture with ACC (Automotive Cells Company) to construct a gigafactory in Termoli, Italy. However, recent developments have led to the withdrawal of this funding.
The original plan involved Stellantis and ACC collaborating to build three battery gigafactories in Europe, with locations in France, Germany, and Italy. This ambitious project was part of a broader strategy to support the growing electric vehicle (EV) market in Europe.
However, in June, the joint venture announced a halt to work on the gigafactories in Italy and Germany. This decision was primarily driven by a shift towards lower-cost batteries in response to a perceived slowdown in demand for electric vehicles.
The situation became more complex in August when Italy’s Minister of Industry, Adolfo Urso, applied pressure on Stellantis to proceed with the gigafactory construction in Termoli. Minister Urso warned that failing to continue the project could result in the loss of funding. The Termoli gigafactory was expected to receive substantial investments totaling around USD 2.2 billion, with contributions coming from Stellantis, ACC, and the Italian government.
The Italian government’s commitment to the project was significant, with plans to contribute over USD 410 million to the Stellantis and ACC joint venture. This contribution was to be sourced from various funds- approximately USD 200 million was allocated from the EU’s post-Covid recovery funds, while another USD 200 million was to come from national and regional Italian funds.
Despite these challenges and the loss of EU funding, Stellantis CEO Carlos Tavares remains optimistic about the future of the gigafactory project in Italy. During a recent event in Turin, Tavares expressed his readiness to move forward with the investments in both Germany and Italy as soon as EV sales in Europe show an increase. He emphasised the need to align capacity expansion with the actual demand for battery cells, stating, “We have, of course, to schedule the capacity increase in accordance with the cell’s (demand) ramp up.”