ACC to receive €437 million to build battery gigafactory

ACC to receive €437 million to build battery gigafactory

Automotive Cells Company (ACC), a joint venture (JV) between PSA Group (Stellantis) and energy giant Total, is going to receive substantial funding to build a massive electric vehicle (EV) battery plant in Germany.

ACC announced that it will receive nearly €437 million (US$520 million) and €52 million (US$61 million) from the state of Rhineland-Palatinate to build its first battery gigafactory in Kaiserslautern area of the Germany state.

Out of the total funding, nearly €386 million will be provided by the Federal Ministry of Economics & Technology (BMVi), which is in charge of ensuring that Germany will become more competitive as well as more prosperous in the future with the development of small and medium-sized enterprises and advancement of new technologies.

The battery JV has plans to start the gigafactory with an annual production capacity of 8 GWh, and then gradually it to 24 GWh to meet potentially high demand for batteries as the world continues to shift from conventional internal combustion engines to electric powertrains.

Construction of the gigafactory is scheduled to start sometime in 2023, while the production will likely commence from 2025. Once constructed completed, the gigafactory is expected to produce and supply enough battery cells for as many as 500,000 electric cars per annum. The project is also expected to provide a big boost to local economy by creating up to 2,000 jobs in addition to a new stream of revenue for the government.

A comparison between the aforementioned manufacturing output and the scale of incentives suggests that the production will be heavily subsidized, and it will be used to support the German car brand Opel, which is also a part of Stellantis. Actually, ACC will only be one of several battery suppliers for Stellantis as the carmaker already has multi-year contracts with CATL, SVOLT, BYD, Samsung SDI and LG Energy Solution. The German gigafactory will not be the only of its kind manufacturing facility that ACC is going to build in the foreseeable future. A second EV battery gigafactory is scheduled to be built in France, most probably just around a year after the construction of the German facility.

In the two gigafactories, ACC intends to invest nearly €5 billion, with roughly €1.3 billion expected to come from the European Union (EU). The lithium-ion technology to be used in the gigafactories will come from Total's subsidiary Saft, which is already working on a €200 million pilot battery project at its Nersac facility.