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ACC Pauses European Gigafactories, Focuses on Affordable Battery Solutions

Prime Highlights:

  • Automotive Cells Company (ACC) has shelved plans to build gigafactories in Italy and Germany due to slower-than-expected electric vehicle demand.
  • The company is exploring lower-cost battery technologies to remain competitive in the evolving EV market.

Key Facts:

  • ACC is a joint venture backed by Stellantis, TotalEnergies, and Mercedes-Benz, and had previously planned to expand Europe’s EV battery production.
  • Stellantis has warned of a 22-billion-euro impact following slower uptake of electric vehicles than initially forecasted.

Background:

European electric vehicle (EV) battery venture Automotive Cells Company (ACC) has decided to halt its plans to build gigafactories in Italy and Germany due to slower-than-expected growth in the EV market. The announcement was confirmed by the Italian metalworkers’ union UILM on Saturday.

“ACC management confirmed to us this morning that the planned gigafactory in Termoli has been definitively shelved, as has the project in Germany,” the union said in a statement.

ACC, a joint venture backed by automotive giant Stellantis, French energy company TotalEnergies, and Germany’s Mercedes-Benz, had put these projects on hold since 2024. The decision comes as the company evaluates a potential shift to less-expensive battery technologies in response to changing market conditions.

The planned facilities were part of Europe’s broader effort to reduce reliance on Chinese battery producers, which currently dominate the market. However, the slower adoption of electric vehicles across the continent has prompted ACC to reconsider its investment strategy. The company has reportedly been in discussions with unions regarding the “modalities for a potential shutdown” of the gigafactory projects in Kaiserslautern, Germany, and Termoli, Italy.

Stellantis, Europe’s second-largest carmaker, recently warned it would face a 22-billion-euro impact due to the slower-than-forecast uptake of electric vehicles. The company admitted it had “significantly overestimated” demand for EVs, reflecting broader market trends as authorities in both the US and Europe have eased strict emissions targets in recent years.

The Italian government had previously withdrawn approximately 250 million euros in European Union funding originally earmarked for the Termoli gigafactory amid uncertainties over the project’s timeline.

While stopping these projects is a setback for Europe’s EV battery plans, ACC’s shift to more affordable battery technology could help the company stay competitive.

As Europe works toward cleaner transportation, the EV industry is adjusting its plans to match actual consumer demand.