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Italy risks losing Stellantis’s third European battery cell plant

The Italian government has allocated a very small part of its national recovery plan to battery production for electric vehicles. The decision could endanger the country’s hopes of being a location for Stellantis’s third European cell production plant.

in Automotive News Europe, by Andrea Malan, 05-05-2021


CEO Carlos Tavares said on April 15 that Stellantis would decide by year end where to locate the factory.

Italy and Spain were seen as the two most likely countries for the plant. The automaker’s first two factories are scheduled to begin production in France in 2023 and in Germany in 2025.

Out of the 192 billion euros available for Italy’s Piano Nazionale di Ripresa e Resilienza (PNRR, National Recovery and Resiliency Plan), just 1 billion will be allocated for “renewable energy and batteries.”

The figure includes investments in solar, onshore wind power and the battery supply chain. An additional 750 million euros of investment will help expand the recharging infrastructure for electric vehicles.

Fabrizia Vigo, head of institutional relations at auto industry group ANFIA, said 1 billion euros would not be enough to help finance a battery plant if the sum is also intended to fund wind and solar energy.

The Motus-e industry association had proposed in a February paper that the Italian government should help fund the creation of a 10-Gigawatt hours production capacity for lithium ion cells, funded with 1 billion euros.

With the increasing trend toward electrifying the European car fleet, battery cell production will be key in helping countries keep production and find new jobs to replace those lost in the move away from internal combustion powertrain production.

The PNRR document mentions the “problem of developing a European battery supply chain in which Italy should also participate together with other countries such as France and Germany, in order to avoid excessive future dependence on foreign producers.”

However, there is no mention of direct subsidies to establish a battery cell plant in the country.

Battery cell projects in Italy

Italy currently has just one project to build a medium-sized battery cell plant. The Italian company SERI has a factory in southern Italy which assembles lithium ion cells with a 300 megawatt-hour annual capacity. It also plans an 8 GWh factory with funding from the European Union IPCEI (Important Projects of Common European Interest) fund.

Fiat Chrysler, now part of Stellantis, created a “battery-hub” in 2020 in the Mirafiori plant in Turin with an initial 50 million-euro investment.

The facility currently assembles battery packs using imported battery cells that are used to power the Fiat New 500 small electric car. This battery hub will also provide battery packs for the next generation Maserati GranTurismo coupe and GranCabrio convertible, which enter production this summer in Mirafiori.

Italvolt, a startup created by Swedish entrepreneur Lars Carlstrom, has announced a project to build a 45 GWh factory in northern Italy, with an estimated 4 billion euro investment. Carlstrom has not revealed details of any private investors, potential industrial partners or potential customers.

According to Italian media reports, he plans to ask local authorities in northern Italy for 1.5 billion euros next month to help fund the project.

Stellantis’s plans

Stellantis has placed its bets on Automotive Cells Company, a joint venture with Saft, a subsidiary of French oil giant Total.

The Automotive Cells Company will build two factories in Europe with a potential capacity of 32 GWh each by 2030. The first in Douvrin, France, will begin production in 2023. The second in Kaiserslautern, Germany, will follow in 2025. Initial cell production in Europe will be 50 GWh of battery cells a year.

Tavares said on April 15 that Stellantis would have access to “no less than 130 GWh battery production capacity between Europe and the U.S., with the figure increasing to 250 GWh by 2030.”

Tavares declined to specify how the 130 GWh capacity would be reached, but he said Stellantis was “moving fast in the U.S. with projects to be announced soon” and that it has “ongoing discussions about additional sourcing in Europe.”

According to ACC, its 5-billion-euro investment will receive 1.3-billion euros from the French and German governments.

Spanish competition

Tavares told Stellantis shareholders on April 15 that the company will decide by the end of 2021 on additional battery cell factories in Europe and the U.S.

Should Italy decide to compete for a production site, it will face strong competition from Spain, whose 10 billion-euro PERTE strategic economic recovery plan concentrates solely on promoting battery electric vehicles.

The Spanish government has already formed a consortium with Volkswagen Group and local utility company Iberdrola, which will build its first battery factory near Barcelona.

Asian and U.S. battery makers also are planning investments in Europe.

 

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