ACC halts gigafactory plans in Germany and Italy

The hall is not yet built, but the decision has been made. Automotive Cells Company (ACC) will not initially realise the planned battery cell factories in Kaiserslautern and in Termoli, Italy. The joint venture founded by Stellantis, Mercedes-Benz, and TotalEnergies is responding to a significantly changed market situation for electric vehicles in Europe. Demand is developing more slowly than expected, while cost pressure is increasing along the entire value chain. Investments worth billions are thus postponed indefinitely.

ACC had originally announced plans to build one of the central European gigafactories for battery cells in Kaiserslautern. The site was expected to create several thousand jobs and become part of a European counterbalance to Asian cell production. The plans for Termoli were similarly ambitious, where an existing engine factory was to be gradually converted into a battery cell production facility. Both projects were considered industrial policy beacons, closely linked with national funding commitments and European climate targets.

Now comes the reversal . ACC stated that investment decisions must be adjusted to the actual market development. In particular, demand for electric vehicles in Europe is lagging behind forecasts, while costs for energy, raw materials, and construction projects have increased. At the same time, technological priorities are shifting. ACC is considering focusing more on cheaper cell chemistries such as LFP, which further questions existing plans.

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In Kaiserslautern, the cancellation triggered significant reactions. State and local politicians warned of a loss of trust in the industrial location. The project was intended as a structural anchor for the West Palatinate, especially in light of the profound changes in drives and supplier structures. Accordingly, there is great concern that the decision will shake not just a single plant but an entire industrial policy narrative.

In Italy, too, the disappointment is great. The conversion of the Termoli site was considered a key project for the transformation of Stellantis plants with a classic combustion engine focus. The postponement raises questions about the future prospects of the plant and increases the pressure on national governments to review their funding and location strategies.

The decision highlights how fragile the European battery cell strategy currently is. While political targets aim for a rapid ramp-up of electromobility, companies are reacting increasingly cautiously. Investments are being stretched, prioritised, or frozen. For the automotive industry, this means additional uncertainty in the localisation of key value creation stages. For politics, the question arises again as to how resilient industrial policy commitments are when market, technology, and cost structures are simultaneously in motion.

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ACC emphasises that the projects are not permanently cancelled, but merely suspended. However, a clear timeline for resumption is missing. This leaves it open whether and when Kaiserslautern and Termoli will actually become pillars of European battery cell production.