Stellantis’ Battery Plans Take Shape in Italy, Canada

ROME (Reuters) -Stellantis made progress with battery production plans in Europe and North America on Wednesday as carmakers race to meet rising demand for electric vehicles.

The company said its Automotive Cells Company (ACC) joint venture with Mercedes-Benz and TotalEnergies would build a battery plant in Italy and boost its capacity in Europe.

Separately, South Korea’s LG Energy Solution (LGES) said it would invest $1.48 billion to set up a joint venture with Stellantis to produce batteries in Canada.

The moves are part of a plan by the world’s fourth largest carmaker to have five battery plants, two in North America and three in Europe, where it has already announced so-called ‘gigafactories’ in France and Germany, also being built via ACC.

They come as rivals also move forward with battery production plans and as the car industry struggles with chip shortages and other supply chain disruptions.

Volkswagen on Wednesday picked a site near Valencia for its planned battery cell plant in Spain, while Tesla on Tuesday launched a factory in Germany, its first European hub.

ITALIAN GIGAFACTORY

ACC said on Wednesday it would convert an existing Stellantis engine plant in Termoli, southern Italy, into a battery facility as agreed in a March 21 memorandum of understanding with Italian authorities.

Italy’s deputy industry minister said in a statement the total investment for Termoli would amount to 2.3 billion euros ($2.5 billion), including 370 million euros in public funds.

That broadly matches investment plans for the gigafactories in France and Germany.

ACC, which is aiming to supply batteries for more than 2.5 million vehicles per year by 2030, also said it would increase its industrial capacity to at least 120 gigawatt hours (GWh) by 2030, versus a initial target of 48 GWh, and scale up the development and production of next-generation high-performance battery cells and modules.

The plan will involve an investment of more than 7 billion euros, ACC said, and will include bringing production capacity at its French and German plants to 40 GWh each, from the 24 GWh initially planned.

This suggests the Termoli battery plan would also have a capacity of 40 GWh.

Tesla’s Berlin plant is aiming for an eventual capacity of 50 GWh.

Presenting its first business plan earlier this month, Stellantis said it aimed to sell five million battery electric vehicles a year by 2030. It also increased its planned battery capacity by 140 GWh to approximately 400 GWh, through its five gigafactories and additional supply contracts.

($1 = 0.9108 euros)

(Reporting by Giulia Segreti and Giulio PiovaccariAdditional reporting by Giuseppe Fonte in Rome, Heekyong Yang and Joyce Lee in Seoul; editing by Jason Neely and Mark Potter)