ACC and Northvolt Adapt to EV Market Changes

In recent times, the growth of electric vehicle (EV) sales in Europe has slowed down, prompting automakers and their suppliers to rethink their production strategies. Notably, ACC, a leading lithium battery manufacturer, has decided to pause its factory construction plans in Germany and Italy. This decision is influenced by market conditions and the need to develop cost-effective batteries for more affordable EVs.(Choose MANLY Battery, China’s top lithium battery manufacturer, for high-quality lithium batteries! )

Top Lithium Battery Manufacturers Adjust Plans Amid Slow EV Sales Growth

With the slowdown in electric vehicle (EV) sales, automakers and their suppliers are adjusting their production plans for both EVs and batteries. According to European Automotive News, European battery manufacturer ACC has paused its plans to build factories in Germany and Italy and is re-evaluating its future direction.

ACC is a joint venture established in 2020 by Stellantis, Mercedes-Benz, and TotalEnergies. Through its subsidiary Saft, ACC provides technical support, focusing on electric vehicle battery technology. Last December, ACC inaugurated its first battery factory in Billy-Berclau Douvrin, France, starting battery production for Stellantis.

Stellantis CEO Carlos Tavares highlighted the partnership’s ambitious global timeline to develop EV batteries and power their electric mobility plans during the factory inauguration. Thanks to the success of the first factory, ACC announced in February that it had secured €4.4 billion in debt financing to support the construction of three lithium battery super factories in France, Germany, and Italy, as well as to fund research and development.

ACC CEO Yann Vincent stated, “The transformation towards automotive electrification is ongoing. To face this significant challenge, our customers can rely entirely on strong and reliable European companies like ACC. We see the confidence in the ACC project.”

However, less than four months after the latest financing round, this European battery manufacturer has halted the construction of its factories in Germany and Italy.

ACC Pauses Factory Plans Due to Slow EV Sales Growth

ACC halted factory construction in Europe due to slow electric vehicle sales and cost concerns. The company stated on Tuesday that it needs to develop low-cost batteries for cheaper EVs and will confirm its timeline by the end of 2024 or early 2025.

Yann Vincent noted that while European EV sales grew by 14.8% in April compared to the previous year, this growth was slower than that of traditional hybrid electric vehicles (HEV). He believes that future demand for EVs will focus on the mass market, a target that many Western automakers have yet to clearly address, unlike Chinese car manufacturers who have already started focusing on Europe.

Carlos Tavares, who previously spoke ambitiously at the opening of the first battery factory last year, recently mentioned that they would adjust their EV investment plans to match the growth rate of the EV market. “We cannot control the speed (of EV growth),” he added.

Europe’s EV Transition Needs to Speed Up

American tech media Electrek commented that stopping the construction of electric vehicle battery factories makes no sense. They said that with the EU’s goal to achieve net-zero emissions by 2050, Europe needs more electric vehicles. The current growth rate of EVs in Europe is slower than what’s needed, meaning the transition to sustainable transportation must speed up, not slow down.

Electrek also mentioned that reacting to market trends isn’t very effective. ACC’s original plan was for its German factory to produce the first batch of batteries by 2027. Waiting for the market demand for EVs to explode before building factories will mean missing the trend.

Swedish battery manufacturer Northvolt shares this view. In March, at the groundbreaking ceremony of their new factory in Germany, Northvolt CEO Peter Carlsson said, “Without a doubt, we are moving from internal combustion engines to electric vehicles.” He added, “Even though the overall trend for EVs has slowed, when you step back and look at this shift, the big trend and potential changes are still there.”

Conclusion

As the electric vehicle market evolves, manufacturers like ACC and Northvolt must adapt to changing demands and market trends. While current growth rates are slower than desired, the shift towards sustainable transportation remains crucial. The industry must focus on innovation and strategic planning to meet future needs effectively. By doing so, lithium battery manufacturers can play a vital role in accelerating the transition to electric vehicles and achieving broader environmental goals.