European car battery company Automotive Cells (ACC) said on Tuesday it is halting construction of two factories in Germany and Italy as it considers a switch to cheaper battery technology.
The new ACC sites are among dozens of battery projects emerging in Europe as they look to reduce dependence on Chinese manufacturers that dominate the market.
Demand in the EV market has shifted to so-called LFP (lithium iron phosphate) batteries, which are less powerful, but also less expensive and longer lasting than NMC batteries, and are increasingly found in cars made by market leaders Tesla and China BYD.
“The European automotive industry is facing slower growth in demand for electric vehicles and at the same time increasing competitive pressure,” which has led the company to revise its “development roadmap,” ACC said in a statement.
As a result, it has halted work on the plants in Kaiserslautern, Germany, and Termoli, Italy, to evaluate the feasibility of developing LFP technologies at the sites.
“ACC is adapting its battery supply strategy to add new low-cost cell chemistries to the portfolio, in response to shifts in market demand towards cheaper vehicles,” Secretary General Matthieu Hubert told AFP.
He said a “new phase of research will take place in the coming months so we can produce these more affordable products”.
ACC is a partnership between French energy giant TotalEnergies, Germany’s Mercedes-Benz and American-European carmaker Stellantis, which produces a range of brands including Peugeot, Fiat and Chrysler.
Last year the company started producing batteries at its first “gigafactory” in northern France, for the Peugeot 3008 mid-size family car, and a second production line will be commissioned in the coming months.
In February, the company said it had secured 4.4 billion euros ($4.8 billion) in financing to expand its capacity, for a total of 13 production lines.
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