Italy cuts funds to Stellantis, Mercedes-Benz EV battery plant

Italy has decided to cut funding for the electric-vehicle battery plant project by Stellantis NV and Mercedes-Benz Group AG, citing delays and a slowdown in EV demand in Europe.

Public funds initially allocated to Automotive Cells Company SE (ACC), which includes the two automakers as shareholders, will be redirected to other green energy initiatives, according to Industry Minister Adolfo Urso.

ACC had planned to build three battery factories in Europe with a total investment of €7 billion ($7.8 billion).

However, preparatory work on the Termoli site in Italy and construction in Kaiserslautern, Germany, have been paused. ACC CEO Yann Vincent mentioned that funding discussions with the government will resume in the first half of next year.

Stellantis will continue motor production at the Termoli plant until 2028 to mitigate the impact of the battery factory delay.

The decision comes amid ongoing tensions between Giorgia Meloni’s government and Stellantis, following the carmaker’s announcement of job cuts in Italy due to an industry-wide demand slowdown.