Mercedes and Stellantis want to break the Chinese battery supremacy

Douvrin The black and white patterned main building of the new Automotive Cells Company (ACC) battery cell production facility towers over the industrial area of ​​Douvrin. Plenty of celebrities gathered in the small town in the northern French department of Pas-de-Calais for the opening of the gigafactory on Tuesday. Not only the bosses of the three companies involved from the car and energy industry came, Ola Källenius from Mercedes, Carlos Tavares from Stellantis and Patrick Pouyanné from Total Energies.

The French government has sent several high-ranking representatives, including Economics Minister Bruno Le Maire. Federal Transport Minister Volker Wissing (FDP) and the Italian Industry Minister Adolfo Urso also attended the meeting on Tuesday. Because Douvrin is about more than just the inauguration of a new production facility.

ACC’s first Gigafactory is a symbol of Europe’s efforts to break Chinese dominance in the manufacture of electric car batteries and become more independent in a key technology of the future. Källenius called the plant a “decisive milestone in Europe’s transformation” to make the local auto industry “more resilient, more competitive and more sustainable”.

The Mercedes boss shared the stage set up in a bare factory hall with the other CEOs. No batteries are assembled here yet, production will only start in the course of the year. Källenius said the cooperation shows the will to keep the car industry in Europe in the electric age and to ensure the economic future of the continent.

With few exceptions, the EU has decided to bid farewell to the combustion engine by 2035. By the end of this decade, Mercedes plans to only produce fully electric vehicles. The Stellantis group, which emerged from the merger of the Peugeot group with Fiat Chrysler, has also set itself ambitious goals. The subsidiary Opel should no longer offer cars with combustion engines in Europe from 2028.

Ola Källenius, Patrick Pouyanné, Carlos Tavares

The CEOs of Mercedes-Benz, Total Energies and Stellantis want to work together with ACC to catch up with the Chinese competition.

(Photo: Reuters)

But tough competition is already emerging from electric cars from Chinese manufacturers, who rely on their market power in battery production. According to figures from the South Korean market research company SNE Research, six of the world’s top ten battery manufacturers come from China. The other four companies in the top ten are based in South Korea and Japan. Although Europe has big plans, it still hardly plays a role in the production of the central component of electric vehicles.

>> Read here: Europe’s difficult standing in the race for the gigafactories

The European car companies want to catch up. Volkswagen is planning battery cell factories with a total capacity of 240 gigawatt hours. And for ACC, the Douvrin site is just the beginning: At the end of 2025, another gigafactory is scheduled to go into operation in Kaiserslautern, and a third factory is planned in Termoli, Italy. The joint venture intends to invest a total of around seven billion euros, of which 1.3 billion euros will come from Germany and France.

The Douvrin gigafactory will start with an annual production capacity of 13.4 gigawatt hours (GWh), which is expected to increase to 40 GWh by the end of the decade. That would correspond to batteries for around 800,000 electric cars a year.

ACC aims to be “Battery Champion with Global Ambitions”.

ACC was formed in 2020 as a joint venture between Stellantis and Total battery manufacturer Saft. Mercedes participated a year later. The self-declared claim of the joint venture is to create a “European battery champion with global ambitions”.

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Mercedes would need total battery capacity if the group actually only sold electric cars by the end of the decade.

This is linked to the goal of not only supplying components for the Stellantis and Mercedes e-models in the future, but also winning more customers. However, the Chinese industry giants such as CATL and BYD have high hopes of expanding their sales in the growing global market for e-car drives. European car manufacturers are likely to be dependent on Asian battery suppliers for some time to come.

ACC is aiming for a production capacity of 120 GWh by 2030, which is around two million electric car batteries a year. If Mercedes actually increases the share of purely electric cars in its car sales to 100 percent by the end of the decade, the German group would need batteries with a total capacity of around 200 gigawatt hours for this alone. The Stuttgart-based company is therefore also cooperating with the Chinese world market leader CATL.

The inauguration of the Gigafactory is particularly important for the French government: President Emmanuel Macron hopes to industrialize his country again with green technologies – and he wants to defend the European economy against competition from China and the USA. His economy minister, Le Maire, said in Douvrin: “Europe must flex its muscles.”

>> Read here: Macron’s declaration of war on Chinese e-car manufacturers

Paris wants to develop the region in north-eastern France into a stronghold of electromobility in the EU. Half an hour’s drive from the ACC Gigafactory is the center of the French car manufacturer Renault for electromobility, where a battery factory is also to be built. President Macron wants to reform the French purchase premium for electric cars in such a way that vehicles produced in China are effectively excluded from the subsidy.

Although Wissing gave his speech on Tuesday in French, he represented the government’s cautious line towards the protectionist tones of the French. Community projects like ACC are about reducing dependencies and ensuring that Europe will continue to be “at the forefront of technological progress” in the future.

Stellantis boss Tavares seems to be following the French course. Speaking to journalists after the opening ceremony, when asked whether European industry needed to be protected from electric cars from China, he replied: “It would be sensible to do so.”

More: This is how the group wants to beat Mercedes and Tesla

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