Italy withdraws funding commitment for ACC cell plant in Termoli
The Italian government will redistribute around 200 million euros in EU funds earmarked for the ACC factory for other purposes, as reported by the news agency Reuters, among others. However, Industry Minister Adolfo Urso explained that separate domestic state money could be made available if ACC can present a new industrial plan for Termoli at a later date.
ACC is the battery cell joint venture between Stellantis, Mercedes-Benz, and TotalEnergies. It is currently pausing construction work on two of its three planned battery cell plants. The sites in Kaiserslautern and Termoli in Italy have been affected. Work is officially on hold there to switch from nickel-based cell chemistry to more cost-effective battery technologies in the early construction phase.
Car manufacturer Stellantis is the largest stakeholder in ACC and came under considerable pressure from the Italian government in August. At the time, Urso was already threatening that the government would use public funds for the project elsewhere if Stellantis did not commit to the site “within hours.” Stellantis issued an immediate statement at the time, stating that ACC is currently improving the plan for the factories in Italy and Germany “to introduce a new technology for the production of cells and modules, to be in line with the evolution of the market.”
Stellantis thus stuck to its line of argument: When the cutback was announced in June, the reason given was the declining demand for electric vehicles – and that the company thus wanted to research and develop more cost-effective batteries to supply cheaper electric vehicles.
ACC initially planned to convert a Stellantis engine plant in Termoli for the Italian plant. An investment volume of around 2 billion euros was stated for this – including 370 million euros in public EU funds from the Corona Recovery and Resilience Facility. However, the funds are limited until the end of 2026. This deadline is making the Italian government nervous, as it fears the money will run out. Initially, the ACC Gigafactory in Termoli was to be commissioned in 2026 and supply up to 40 GWh of cells per year in a later final expansion stage.
ACC intends to specify exactly what will happen in Kaiserslautern and Termoli at the end of 2024 or the beginning of 2025. However, the redirection of EU funding, which the Italian government has now announced, does not suggest that production is likely to start in Italy in the short to medium term. Despite the back door that Rome is holding open. It is not yet known to what extent the reorientation phase at ACC will also affect the third factory in France. The first production block with 13.4 GWh is currently being ramped up there. Two more blocks were previously planned to reach 40 GWh.
The joint venture currently focuses solely on NMC battery cells (nickel-manganese-cobalt). Competitor Renault has also pursued an NMC-only strategy to date, but is now also opening up to the more favourable LFP technology. In this phase of reorientation, Stellantis is currently endeavouring to avoid giving the impression of inaction. At the beginning of July, the Group announced that it had agreed on a five-year collaboration with the French state research organisation CEA to develop next-generation battery cells. However, it is not known which cell chemistry is the focus of the Stellantis-CEA collaboration. There is only talk of ‘disruptive cell chemistries’, which does not necessarily speak in favour of the already quite common LFP technology.
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