ACC’s European EV battery venture on track for production, says CEO Yann Vincent
ACC is the joint venture set up by TotalEnergies and Saft with carmaker Stellantis, to establish world-class EV battery manufacturing in Europe. CEO Yann Vincent gives an update on progress since ACC’s pilot line was launched by President Macron in January 2020.
The market for electric vehicles (EVs) reached a tipping point in 2020. While car sales globally declined by 16 percent as a result of the COVID-19 pandemic and the ensuing economic damage, sales of battery EVs rose by 40 percent. In the final quarter of the year, battery electric and plug-in hybrid vehicle sales grew by more than 300 percent in the five biggest European markets.
With consumer demand shifting decisively in favor of EVs, carmakers and governments in Europe want to secure a degree of industrial independence by building up their capacity to develop and manufacture batteries. As a result, Automotive Cells Company (ACC), TotalEnergies and Saft’s joint venture with Stellantis, the carmaker formed by the merger of Fiat Chrysler with Groupe PSA in early 2021, has secured €1.3bn of financial support from the French and German governments, with the backing of the European Union, to develop new EV batteries and build them in France and Germany.
“It does not make sense for European carmakers to keep bringing in 500kg batteries from Asia, especially in terms of C02 emissions,” says Yann Vincent, ACC’s CEO. “The very significant advantage EVs have is zero emissions on the road, and this should not be undermined by the battery manufacturing process. The closer we are to where the cars are produced, and the more renewable the electricity used is, the better.” ACC plans to be able to produce batteries for 1 million vehicles per year by the end of the decade, thanks to its 2 Gigafactories that will each have a capacity of 24 to 32 GWh.
There are three parts to ACC’s planned development and manufacturing operations: a research and development center in Bordeaux, a pilot plant in Nersac, and two Gigafactories, one at Douvrin, northern France, and the second one at Kaiserslautern in Germany. ACC will move into the Bordeaux site around the middle of this year, says Mr Vincent, and the pilot plant in Nersac, which is a scale model of one of the Gigafactories, is under construction now and will be operating by the end of 2021, he adds.
The aim is for the first Gigafactory in Douvrin to start production before the end of 2023. However, this is subject to a public consultation on the project, which was carried out between February and April 2021. Production in Germany is expected to start in 2025.
Mr Vincent says 1,400 to 2,000 jobs will probably be created at Douvrin / Billy-Berclau. This is a partial response to the inevitable decline in thermal engine production by the current Stellantis plant. Different skills will be needed in battery production, and addressing this skills gap will notably be discussed as part of the public consultation, he adds.
“It does not make sense for European carmakers to keep bringing in 500kg batteries from Asia, especially in terms of C02 emissions”Yann Vincent CEO of ACC
Creating a European champion
Although Asia is currently the global hub of EV battery making, there is no reason European manufacturers cannot compete on price, because the biggest costs in battery making are the chemicals, the capital-intensive manufacturing process and the cost of energy, says Mr Vincent.
“In these three areas, there is no competitive disadvantage with Asian manufacturers,” he explains. “The share of labor in the overall cost of a battery is limited, and the difference between the labor cost in Europe and Asia is offset by the cost of shipping the battery here.”
ACC is also focused on developing batteries that perform at the highest technological level in terms of energy performance, range, recharging time and carbon footprint, and recycling is also a priority. The batteries will be used for at least eight years in vehicles, then used in energy storage systems until they come to the end of their useful life after 15 years. The goal is to make sure the batteries are made with 95 percent recyclable materials, says Mr Vincent.
Battery prices remain the top consideration for automakers, says Mr Vincent, as they race to bring down the cost of EVs to the same level as fossil fuel vehicles. ACC is in ongoing discussions with Renault about joining the joint venture, he adds.
“The attitude of manufacturers is nothing like it was a year ago, everyone has understood that the internal combustion engine is dead, later or rather sooner, and that the alternative is electric vehicles,” says Mr Vincent. “They need more battery production capacity, but in addition we have to be highly competitive on price, in order to help them sell electric cars.”
“The attitude of manufacturers is nothing like it was a year ago, everyone has understood that the internal combustion engine is dead, later or rather sooner, and that the alternative is electric vehicles”Yann Vincent CEO of ACC