The Great Retreat in the European Automotive Industry
According to Euronews, Automotive Cells Company (ACC), a battery manufacturer financially backed by the European automotive giant Stellantis, announced that it has abandoned its plans to build battery gigafactories in Italy and Germany.
Italy’s metalworkers’ union said it was informed of the decision on Saturday.
In a statement, the union said: “The management of Automotive Cells Company confirmed this morning what we had long feared: that the plan to build the gigafactory in the city of Termoli has been definitively abandoned, and that the similar project in Germany has also been cancelled.”
ACC said it is currently reviewing the complete suspension of these projects, which have effectively been halted since 2024 following weaker-than-expected growth in the electric vehicle market.
These new projects were intended to be part of dozens of battery initiatives in Europe aimed at reducing dependence on Chinese manufacturers that dominate the market. However, they were ultimately halted amid a reassessment and a shift toward cheaper battery technologies.
ACC stated: “It is clear that the necessary prerequisites for restarting our projects in Germany and Italy have not yet been met.”
The company also said it is in talks with labor unions regarding “the possible suspension of gigafactory construction projects in Kaiserslautern and Termoli.”
Automotive Cells Company is a joint venture between the French energy company TotalEnergies and automakers Mercedes-Benz and Stellantis. Stellantis owns brands including Peugeot, Fiat, and Chrysler.
Stellantis, Europe’s second-largest carmaker, warned on Friday that it expects losses of around €22 billion due to lower-than-anticipated demand for electric vehicles.
The company also acknowledged a “significant overestimation” of demand for electric cars, a development that comes as U.S. and European authorities retreat from stringent environmental targets after years of pressure to produce cleaner vehicles.
In September 2024, the Italian government announced it had withdrawn approximately €250 million in European Union funds previously allocated to the gigafactory, citing uncertainty over the project’s timeline. / Tasnim
