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According to Bloomberg and other media reports, Automotive Cells Company (ACC), a joint venture between Mercedes-Benz, Stellantis, and Saft, has halted its power battery factory construction projects in Europe and is reassessing its development direction, potentially shifting towards the production of more cost-effective lithium iron phosphate (LFP) batteries.

Earlier this year, ACC raised €7 billion to build three factories: one in Kaiserslautern, Germany, another in Termoli on the southern Adriatic coast of Italy, and a third in France, with the location yet to be determined. In March, ACC announced plans to build a second factory near its Douvrin battery plant in France, doubling its existing capacity to 26 GWh, with operations set to commence in 2026.

However, according to reports from Bloomberg and other media on June 4, 2024, ACC has halted work on its German battery factory, and preparations for the Italian battery factory have also been suspended. The reason for pausing construction is to address the slowdown in electric vehicle sales and rising costs.

ACC CEO Yann Vincent stated that demand for electric vehicles in Europe has slowed. High interest rates and cuts in government subsidies have prompted consumers to favor hybrid electric vehicles or fossil-fuelled vehicles over electric ones. According to recent sales data from the European electric vehicle market, EU countries’ electric vehicle sales in April reached 108,000 units, a year-on-year increase of 14.8%, slightly higher than the overall growth rate of the EU automotive market (914,000 units, a year-on-year increase of 13.7%), but lower than the growth rate of traditional (non-plug-in) hybrid electric vehicles (266,000 units, a year-on-year increase of 33.1%).

European automakers are facing pressure from the growing exports of Chinese companies, which primarily use LFP batteries, significantly reducing production costs.

Reports indicate that ACC is considering the production of cheaper LFP batteries to address the current market situation. ACC CEO Yann Vincent also mentioned that one possibility for the Kaiserslautern plan is to produce low-cost LFP batteries. The company needs to research and develop low-cost batteries to supply affordable electric vehicles and will confirm its industrial and construction timeline by the end of 2024 or early 2025.

Source: WeChat Official Account—青蓝能源

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