Mercedes and Stellantis pause European EV battery plans, look to LFP

Mercedes-Benz and Stellantis are pausing work on two EV battery plants and may be looking to LFP battery cells to lower costs, reports Bloomberg.

Automotive Cells Company (ACC), a battery supplier for the two automakers with plans to open three new battery plants in Europe at a cost of 7.6 billion euros (approximately $8.2 billion at current exchange rates), has stopped construction at a site in Kaiserslautern, Germany, and paused prep work at a site in Termoli, Italy, according to the report.

Demand for EVs in Europe has slowed, with growth only expected in mass-market segments, ACC CEO Yann Vincent said in an interview on the sidelines of a recent Bloomberg New Energy Finance conference. Mercedes and Stellantis are now requesting lower-cost batteries for entry-level EVs, Vincent told Bloomberg.

This has led ACC to reconsider its plans. One option is to manufacture LFP battery cells in Kaiserslautern, Vincent said, adding that a final decision is due later this year or in early 2025, with cell production starting up to 2.5 years after that. ACC put out a separate statement June 4 saying it had “reopened discussions on plans” for the Termoli factory, Bloomberg noted.

Mercedes and Stellantis aren’t the only automakers cooling on new European battery factories. Volkswagen said last month that its European battery factories may take longer to reach full capacity, while both VW and Renault have moved away from plans to sell shares in EV or battery businesses, Bloomberg noted.

Sales of battery electric models overtook sales of diesels in 2022, signaling a sea change for the Continent, where diesel was once an institution. And upcoming models like the Renault 5 E-Tech have generated a lot of buzz in Europe.

2025 Renault 5 E-Tech

The EV affordability picture for Europe certainly looks better than that of the U.S. EV prices have skewed lower this year, but there’s a dearth of affordable EVs.

Like Mercedes and Stellantis, Ford aims to fill the affordability gap with EVs powered by LFP batteries, which it plans to make in the U.S. But the affordable EV that’s generated the most interest recently—outside the returning Chevrolet Bolt EV of which there are few details—is the 2024 Chevy Equinox EV, which will have a base version priced at $35,000 with destination.