Mercedes Benz, Stellantis, Siemens, and TotalEnergies have agreed to a joint venture to construct three gigafactories in Europe to aid electric vehicle manufacturing.
Since the recent European energy crisis, electric vehicles have grown in demand from consumers, corporations, and even governments. And this deal, worth roughly 7 billion euros ($6.79 billion), looks to address that. According to Reuters, the joint venture called Automotive Cells Company (ACC) will construct three gigafactories and is currently looking at locations in Billy-Berclau Douvrin, France, Kaiserslautern, Germany, and Termoli, Italy.
For automakers such as Mercedes Benz and Stellantis, domestic European batteries are hard to come by. But with the creation of ACC, automakers will have a new source to address the demand. Each proposed gigafactory has a planned capacity of 40GWh annually by 2030. This is roughly the same capacity as Tesla’s Giga-Nevada facility.
ACC would also create more competition in the battery market, long dominated by Chinese and South Korean battery options, but they aren’t the only ones looking to do so. Northvolt has made a name for itself by partnering with Volkswagen Group, BMW Group, and others. And Northvolt already operates two production facilities with a combined output of 48GWh, with more planned for the future.
The real challenge will be in differentiating itself in the ever more crowded battery market. Northvolt has found success in recent years by using super low-cost power sources near their gigafactories to produce batteries while also priding themselves on their sustainability efforts generally.
This is where Siemens comes into the deal. Siemens explained in a comment to Reuters that ACC will use its cloud-based services and software offerings to help maximize efficiencies. “ACC uses virtually the entire spectrum of Xcelerator – from factory construction to production automation to building services,” Siemens managing board member Cedrik Neike told Reuters.
ACC has a long time before they are up and running. Still, the question of differentiation and specialization will make or break the new joint venture in the ever more competitive battery manufacturing business.