Two French multinational giants, oil major Total and automotive manufacturer Groupe PSA, have announced the creation of Automotive Cells Company, a joint venture that will invest billions into battery manufacturing for electric vehicles.
The joint venture is targeting cumulative production capacity of 48GWh by 2030, the equivalent of one tenth of the European EV marktet, and will see a series of “giga-factories” across the continent.
The announcement follows a January pilot between Total, through its affiliate Saft, a major battery maker that it acquired in 2016 to support the growth of wind and solar and with an eye on the growing EV market.
“The fast-growing development of electric mobility offers Total, via Saft, another opportunity for growth and commitment to a decarbonized economy,” Totatl chairman Patrick Pouyanné said.
“With the support of French, German and European authorities, we will deploy our best expertise and technologies alongside our partner Groupe PSA, to create a competitive European battery industry.”
Planned investment for the original partnership was imagined in phases tied to the development of large-scale production plants, starting with an 8GWh production plant in the northern Hauts-de-France region which would then increase to 24GWh, followed by a second production plant in Germany with the same capacity plans.
The two companies expected their initial partnership would yield the production of one million batteries annually, or around 10% to 15% of the European market, and would require nearly €5 billion in investments.
“Our purpose is to offer citizens mobility options that are clean, safe and affordable,” Carlos Tavares, Chairman of the Managing Board of Groupe PSA, said at the time. “I am convinced that this project, with our partner Total/Saft, will create a benchmark player in automotive battery cell development and production in Europe.”
Fast-forward seven months and the two companies have formalised the creation of Automotive Cells Company (ACC) and appointed two management positions – Yann Vincent, industrial director at Groupe PSA, has been appointed as CEO of ACC, while Saft CEO Ghislain Lescuyer will act as chairman of the ACC board.
Backed by financial support from French and German public authorities to the tune of €1.3 billion, ACC will seek to mobilise investment of more than €5 billion.
Total/Saft will contribute its expertise in R&D and industrialisation, and Groupe PSA its knowledge of the automotive market and its experience in production. ACC will follow through on the original partnership’s plan of delivering high-performance batteries for the automotive industry from 2023.
Its R&D centre in Bordeaux and its pilot site in Nersac have already gotten underway and are looking to develop new high-performance lithium-ion technologies.
The planned gigafactories have also been given specific locations, the first to be built in Douvrin, France, and the second in Kaiserslautern, Germany.
Both intended to start with production capacity of 8GWh, they are expected to reach a cumulative production capacity of 48GWh by 2030, delivering batteries for 10% of the European Market which is expected to hit 400GWh by the same period.
“The construction of the European battery consortium that we wished for is now a reality,” said Carlos Tavares. “I would like to pay special tribute to the commitment of the Total/Saft and Groupe PSA/Opel teams who have made this project come true.
“The creation of ACC illustrates Total’s commitment to meet the challenge of climate change and to develop as a broad energy company, a major player in the energy transition, by continuing to provide affordable, reliable, and cleaner energy,” added Patrick Pouyanné.