Mercedes-Benz joins Stellantis to build European battery giant

Mercedes-Benz joins Stellantis to build European battery giant

Business news |
By Nick Flaherty

Mercedes-Benz has joined competitor Stellantis and battery maker Saft to boost production of lithium ion cells in Europe.

Mercedes is taking a 33 percent stake in French battery startup ACC  (the Automotive Cells Company) to boost production capacity to 120 GWh in Europe by 2030. Mercedes will be investing around €500m next year as part of the project, expected to need €7bn in equity, debt and subsidies.

This comes as Korean spinout SK Battery plans capacity of 500GWh by the same date.

Mercedes-Benz plans to go fully electric by the end of the decade but will need battery production capacity of more than 200 GWh by 2030. It already has supply deals with SK battery, CATL and Farasis, and is developing its own battery technology in Stuttgart.

Mercedes uses a modular, highly standardised battery kit that allows the integration of battery cells and modules from different development partners through uniformly designed components and interfaces. The aim of the partnership is the joint development of cells and battery modules based on battery technology from French supplier Saft, a subsidiary of petrochemical company TotalEnergies.

The partners are also exploring the use of silicon anodes and solid-state batteries. ACC will primarily use electricity from renewable energies for the production of the high-performance battery technologies, and only use raw materials extracted from certified mines will be used. ACC battery cells will also be over 95% recyclable to kickstart a closed loop raw material cycle. This is a key element in accessing funding from the European Commission as part of the Green Deal.

ACC, only formed last year, will supply Mercedes-Benz with high-performance battery technologies from its production locations from the middle of the decade. Its R&D centre in Bordeaux, France is operational and the pilot site in Nersac, France, will start production at the end of this year. The company is also looking at expanding its production network to include further locations in Europe.

Next: Battery gigafactory competition

“Together with ACC, we will develop and efficiently produce battery cells and modules in Europe – tailor-made to the specific Mercedes-Benz requirements“, says Ola Källenius, CEO of Daimler AG and Mercedes-Benz AG. “This new partnership allows us to secure supply, to take advantage of economies of scale, and to provide our customers with superior battery technology. On top of that we can help to ensure that Europe remains at the heart of the auto industry – even in an electric era: With Mercedes-Benz as a new partner, ACC aims to more than double capacity at its European sites to support Europe’s industrial competitiveness in the design and manufacturing of battery cells.”

Although Stellantis is a competitor with 14 brands including Fiat, Chrysler, Opel, Peugeot, Citroen and Vauxhall, this is less direct competition than the VW group, which has a strategic deal with battery supplier NorthVolt which also supplies BMW. Another startup, Verkor in France, is also planning to build a battery gigafactory to supply Renault. 

“To have Mercedes-Benz join us as a new shareholder is a major milestone for ACC. Mercedes-Benz will bring a vote of confidence in our technology roadmap and product competitiveness that significantly strengthens ACC’s business potential and underpins our ambitious growth plans. This is our contribution to an electric and sustainable future,” said Yann Vincent, CEO of ACC.

“We welcome Mercedes-Benz as a strategic partner who shares our ambition to accelerate ACC’s leadership,” said Stellantis CEO Carlos Tavares. “Stellantis’ electrification strategy is running full-speed ahead, and today’s announcement is the next step in our plan to be the automotive frontrunner, with all 14 brands committed to offering best-in-class fully electrified solutions that meet demands of customers. This consortium leverages our shared technical expertise and manufacturing synergies, and continues to ensure that Stellantis leads the way the world moves in the most efficient, affordable and sustainable way.”

“Mercedes-Benz will take a strategic 33 percent equity stake in ACC. Following the investment, we will hold two out of six seats on ACC’s Supervisory Board alongside TotalEnergies and Stellantis as equal shareholders,” said Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG; responsible for Daimler Group Research and Mercedes-Benz Cars COO. “Our goal is to continue to integrate the most advanced and sustainable battery cells in our EQ models. Therefore, we will provide our technological and production know-how to ACC. Mercedes-Benz will further complement high end cell development with its newly planned pilot plant ‘Drive Systems Campus’ in Stuttgart from 2023 onwards.”

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