Europe’s two largest automakers, Stellantis and Mercedes-Benz, have raised around 4.4 billion euros in loans to build three new electric vehicle factories across the European Union (EU) in the coming years.
The companies announced in a press release on Monday that the total funding required for these factories is expected to be around 7 billion euros.
The factories will be built in Kaiserslautern in Germany, Termoli in Italy and an undisclosed location in France. About 6 thousand people are expected to be employed in the factories.
BNP Paribas, ING, Deutsche Bank and Intesa Sanpaolo are among the banks financing the project.
The German and French governments have also contributed around 1.3 billion euros, but the Italian government has yet to provide resources.
What is the reason for this rapid push for electric vehicle factories?
The move comes at a time when the European car sector is more concerned than ever about China’s dominance, especially when it comes to electric vehicles.
Statista emphasizes that China produced around 5.47 million battery-powered vehicles in 2022, accounting for more than half of global electric vehicles.
Chinese electric vehicle manufacturer BYD’s battery-only vehicle sales reached 526,000 in the fourth quarter of 2023, surpassing Tesla, which sold 484,500 vehicles.
This has exacerbated concerns that China has a key position in the EV battery supply chain and could potentially use this as a weapon in the event of geopolitical tensions.
According to Benchmark Mineral Intelligence, China is expected to build around 160 more gigafactories by the end of the decade, while Europe is expected to build only 36 more.
Automotive Cells Company (ACC) was launched as a counterforce to this growing Chinese dominance by helping Europe advance its plans to produce electric vehicle batteries locally.
With batteries accounting for a large portion of the cost of electric vehicles, locally sourced batteries can go a long way in lowering EV prices as well as smoothing supply bottlenecks.
According to ACC President Yann Vincent, “The transition to vehicle electrification is still ongoing. To meet this enormous challenge, our customers must be able to rely on solid and reliable European players like ACC, who can offer high volumes of competitive batteries with a low CO2 footprint.”
