Automotive Cells Company SE (ACC), the electric vehicle battery joint venture of Stellantis NV and Mercedes-Benz Group AG, has successfully raised $4.7B (€4.4 billion) to fund the development of its new gigafactories in the European Union on February 12.
Debt deal details
The recent press release asserted that Stellantis and Mercedes, along with Total Energies, have launched one of the European automotive sector’s biggest fundraising initiatives in history.
Several banks financing the debt deal include BNP Paribas, ING, Deutsche Bank, and Intesa Sanpaolo. The governments of Germany and France also participated in the fundraising with approximately €1.3 billion share. Italy has not yet allocated any amount to the funds.
“The transition to the electrification of vehicles is still on the way. To meet this immense challenge, our customers must be able to rely on robust and reliable European players like ACC, capable of delivering high volumes of competitive batteries with a low CO2 footprint.
With this world-class financial community supporting us, we see clear evidence of the confidence that is placed in the ACC project. Beyond this operation, we will determine our needs as and when we conclude additional contracts. We are resolutely looking to the future, with a view to achieving our objective of growing our production capacities.”
Yann Vincent, ACC Chief Executive Officer
Planned gigafactories
As of now, ACC produces li-ion batteries in an existing gigafactory in Billy-Berclau, France.
With the fresh funds, the battery joint venture’s battery production will soon expand with a new factory in Kaiserslautern, Germany. There will also be two factories in Termoli, Italy, and one factory somewhere in France.
The company expects the project to generate a total of 6,000 new job opportunities for locals around the area, reports Reuters.
“€4.4 billion secured in one of Europe’s largest-ever debt raisings in this industry to develop 4 blocks of production in addition to the one currently in operation in France.”
ACC
Primary purpose
As mentioned, the accumulated funds from the debt deal will fund Stellantis-Mercedes battery JV’s production ramp-up with the imminent development of four new gigafactories in the EU in the following years.
It would play a significant role in boosting the region’s electric vehicle industry to compete with China’s dominance and total control over the global battery supply chain.
In 2022, China’s battery-electric vehicle production reached some 5.47 million units. It accounted for over 50% of the global volume, according to Statistica’s data.
In Q4 2023, Chinese giant BYD overthrew American pioneer Tesla with 526,000 unit sales (vs. 484,500). Alarmingly for the European EV industry, China projects to develop 160 new gigafactories by 2030. In contrast, Europe is only expected to have 36 new gigafactories by the same period.
Therefore, the upcoming four new battery gigafactories of ACC will significantly aid the EU in its efforts to catch up with China in both the electric vehicle and battery industry.
ACC aims to invest about €7 billion (about $7.5 billion) in the early stages of its development by adjusting the shareholdings of TotalEnergies SE’s Saft, as per its official website. Stellantis and Mercedes are also expected to boost their respective equity stakes in JV.
