Europe’s latest battery factory pause will only cede more market share to China
European slowdown
Mercedes-Benz, Stellantis and TotalEnergies’ cell production JV, Automotive Cells Company (ACC), announced it will pause development at its German and Italian plants, and possibly switch cell chemistries from NCM- to LFP-based batteries to target the growing mass market segment.
ACC, established in September 2020, was granted development funding totaling €437 million ($470 million) in 2021 from the Federal Ministry of Economics and Technology (BMVi) and the state of Rhineland-Palatinate for the Kaiserslautern facility.
The move comes as European EV uptake has underwhelmed in recent months – in Q1 2024, European passenger EV battery capacity deployment rose 8% compared to the same period the year prior, while China and the US rolled out an additional 34% and 11% gigawatt-hours, respectively.
Germany’s performance was particularly weak, falling 8% year on year in GWh terms during the quarter, which resulted in the UK taking over as the region’s largest market, while Italy – only the 8th largest EV market in Europe to begin with – also pulled back sharply.
LFP cell chemistries, proliferated by China, have increasingly tantalized European cell producers, as evidenced by Stellantis’ recently announced JV with CATL to build an LFP cell plant in Spain.
아다마스의 견해:
CC’s decision appears hinged on the recent data only.
Due to the long development timelines of these projects, waiting for EV sales to pick up before investing in additional battery capacity could result in regional cell supply deficit when it’s needed, a scenario which would likely cede even more market share to China.
Considering the vast majority of European cell capacity in the pipeline today is NCM, shifting some of ACC’s plants to LFP will help balance market offerings more in line with the global mix.
In our view, however, it would be prudent to prioritize LFP technologies with demonstrable cold weather resilience.
[Extract from the June issue of the EV Battery Lithium Monthly service.]
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