Vehicles powered by electricity - Building process of a battery cell plant in Kaiserslautern comes to a halt.
A proposed battery cell factory in Kaiserslautern has hit a snag. The State Chancellery in Mainz recently disclosed, in response to an inquiry, that they learned from the German-French battery cell maker ACC about their decision on the previous Wednesday. The news had previously been reported by the "Rheinpfalz" newspaper.
The publication quoted ACC's general secretary, Matthieu Hubert, who talked about a "pause" in the project. The market for electric cars is growing at a slower pace than anticipated, and European consumers haven't been quick to switch to new electric vehicles en masse. Other obstacles, like infrastructure issues and high material costs, are also a concern. According to Hubert, "before we invest, and we're talking billions here, we need to determine which type of battery cell technology the market needs."
The decision about the future of the project in Kaiserslautern is expected by the end of this year or the start of the following one. ACC is a joint venture of the automotive companies Mercedes-Benz and Stellantis (Peugeot, Opel, Fiat) and the energy company Total.
This factory, situated at the Opel site in Kaiserslautern, is being financed with around €437 million in state funds. In September 2021, former Federal Economic Minister Peter Altmaier (CDU) and Rhineland-Palatinate Prime Minister Malu Dreyer (SPD) officially approved the funding. Earlier reports suggested that about 2,000 new jobs would be created in Kaiserslautern.
Industry expert Ferdinand Dudenhöfer views ACC's decision as a warning sign. He stated, "Politics has made customers uneasy with the customs dispute, the halt in funding for electric cars, and health concerns over combustion engines." If the building of a crucial battery factory now faces a delay, China's leading position in production will only widen. "So, jobs will be transferred from Europe to China."
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The battery cell factory project in Kaiserslautern, backed by ACC, a joint venture involving Mercedes-Benz, Stellantis (Opel, Fiat), and Total, is currently on hold due to market conditions and other challenges. The proposed factory at the Opel site in Kaiserslautern would create around 2,000 new jobs and is being funded with €437 million from the German state.
Industry analyst Ferdinand Dudenhöfer expresses concerns about the pause in the project, stating that political issues such as the customs dispute, funding halt for electric cars, and health concerns over combustion engines have made potential customers uneasy. If the construction of this crucial battery factory is delayed, China's lead in production will likely increase, potentially leading to job losses in Europe.
The State Chancellery in Mainz announced that they were informed by ACC about their decision to pause the project in Kaiserslautern on a previous Wednesday. The newspaper "Rheinpfalz" reported this news, mentioning Matthieu Hubert, ACC's general secretary, who cited market growth and technology choice as factors for the pause.
European consumers' slow transition to electric vehicles and challenges such as infrastructure issues and high material costs are also contributing to the hesitation to invest in the battery cell factory. The German-French battery cell maker is considering the type of battery cell technology that will best serve the market before proceeding with the project.
The decision regarding the future of the project is expected by the end of this year or the beginning of the next. This pause in the construction of the factory comes amidst a growth in the market for electric cars, but with Europeans not yet making a mass shift to these vehicles.
The Rhineland-Palatinate Prime Minister Malu Dreyer (SPD) and former Federal Economic Minister Peter Altmaier (CDU) approved state funding for the project in September 2021, aiming to bring significant economic benefits to Kaiserslautern.
