The Italian government has announced plans to reallocate approximately €200 million ($223 million) in European Union funds previously earmarked for a Stellantis-led battery manufacturing project in eastern Italy. This decision comes as the automotive industry grapples with slower than expected growth in demand for electric vehicles.
Automotive Cells Company (ACC), a battery joint venture in which Stellantis is the majority shareholder, had originally planned to build three gigafactories across Europe, including sites in France, Germany, and Italy. However, in June, ACC suspended work on the Italian and German facilities, citing a shift toward lower-cost battery technologies.
During a meeting at the Italian Ministry of Industry, ACC confirmed the ongoing uncertainty regarding the timeline for the construction of the gigafactories in Germany and the Italian city of Termoli. The company said it was ready to start construction in late June, but had to adapt to changing market conditions and customer requirements.
Italian Industry Minister Adolfo Urso said the reallocated EU funds would be used for alternative investments in line with Rome’s strategy for a greener economy. However, he noted that separate domestic funding could potentially be made available should ACC present a revised industrial plan for the Termoli site in the future.
Stellantis CEO Carlos Tavares emphasized that the company’s battery production capacity would be scaled in accordance with electric vehicle demand. He stated that investments in additional plants in Germany and Italy would be triggered once EV sales in Europe demonstrate sufficient growth.
Despite the setback for the battery plant, Stellantis has assured the Italian government that it will continue producing internal combustion engines in Termoli, maintaining current employment levels as the facility transitions towards potential future battery production.
This development reflects broader challenges faced by the European battery industry, as evidenced by recent cost-cutting measures announced by Northvolt, another major player in the sector.
Source: Reuters
