Italian government issues notice to Stellantis: battery production

The Italian government has issued a stern warning to Stellantis that public funds will be diverted elsewhere if it does not make a firm commitment to build a battery production plant locally.

Stellantis had pledged to build a battery factory in Italy through its largest investor, the ACC Battery joint venture, as well as two other battery gigafactories in Europe. However, construction of the Italian and German factories was put on hold earlier this year.

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At a recent conference in Italy, Industry Minister Adolfo Urso said Stellantis must commit to the project or risk losing 370 million euros ($411 million) in public money from the European Union’s post-coronavirus recovery fund.

“Stellantis has to give us an answer, and it has to be given quickly,” Urso said. “If Stellantis doesn’t give us a positive response within hours, we will move the funds elsewhere. We can’t lose these funds because Stellantis didn’t keep its promises.” Urso added that the ministry waited too long for Stellantis to respond, saying “the government did its part, but the company didn’t.”

ACC, which is partly owned by Mercedes and Total Energy, said it would confirm its industrial and construction timelines later this year or in early 2025. The company initially expected to start operating a new battery plant in Termoli, Italy, in 2026, but is now revising plans for that plant and one in Germany “to introduce a new cell and module production technology adapted to market developments.”

Reuters It is understood that slowing demand for electric vehicles has prompted the carmaker to increase production of hybrid system components at its Termoli plant.