Italian Government Puts Stellantis On Notice: Build Battery Plant Or Lose Funding

The Italian government has issued a stern warning to Stellantis that if it doesn’t give a firm commitment to establishing a local battery production plant, public funds will be moved elsewhere.

Stellantis had promised to establish a battery factory in Italy through the ACC battery joint venture that it is the largest investor in, alongside two other battery gigafactories in Europe. However, work on plants in Italy and Germany were put on hold earlier this year.

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During a recent conference in Italy, industry minister Adolfo Urso said that Stellantis must commit to the project, or else it is at risk of losing €370 million ($411 million) in public funds from the EU’s post-COVID-19 recovery fund.

“Stellantis must give us a reply, and it must do so shortly,” Urso said. “If Stellantis does not give us a positive feedback within hours, we’ll move… funds elsewhere. We can’t afford to lose these funds because Stellantis is not sticking to its commitments.” Urso added that the ministry has been waiting on answers from Stellantis for too long, and said that while “the government did its part, the company did not.”

ACC is part-owned by Mercedes and TotalEnergies and says it will confirm its industrial and construction timeline later this year or in early 2025. It had initially expected to begin operations at a new battery plant in Termoli, Italy, in 2026, but is currently revising plans for this site and one in Germany “to introduce a new technology for the production of cells and modules, to be in line with the evolution of the market.”

Reuters understands that slowing demand for electric vehicles has prompted the carmaker to increase output of components for hybrid powertrains at the Termoli factory.