Italy to Reallocate €200 Million in EU Funds from Stellantis Battery Plant as EV Demand Slows

Italy's government has decided to reallocate €200 million ($222.78 million) in European Union funds, previously designated for a Stellantis-led battery plant in Termoli, to other green initiatives. This decision follows Stellantis' announcement of delays in its European battery gigafactories, driven by slower-than-expected demand for electric vehicles (EVs).

Automotive Cells Company (ACC), a joint venture involving Stellantis, Mercedes, and TotalEnergies, had initially planned to build three gigafactories in Europe. However, due to evolving market dynamics and the switch to more cost-effective batteries, ACC has postponed construction on two of the plants—in Termoli, Italy, and Germany.

While demand for lithium-ion batteries remains crucial for Europe's EV transition, the anticipated growth in EV sales has been slower than projected. The venture noted that these delays were influenced by shifting technological demands from automakers and the slower-than-expected pace of EV adoption.

Italy's Industry Minister, Adolfo Urso, confirmed the reallocation of the EU funds to other energy-related projects aligned with the country's green economic strategy. Despite the setback, ACC indicated its willingness to revisit the Termoli project, contingent on future market conditions and the availability of national subsidies.

Stellantis assured the Italian government that it would continue to manufacture internal combustion engines at the Termoli plant, maintaining current employment levels during the transition.