Italian EV Battery Plant to Get Government Funding

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Plans for a 1 billion-euro (US$1.1 billion) electric vehicle (EV) battery plant in southern Italy look set to advance after the government's Minister of Economic Development confirmed that financing will be approved in the coming weeks.

The plant in Termoli has been proposed by Stellantis, a company officially formed in January from the merger of Fiat Chrysler and Peugeot S.A. (PSA), and is the third of five such planned plants to be announced by the company in Europe and North America. The objective set by Stellantis is that electrified vehicles will represent more than 70% of sales in Europe and more than 40% of those in the U.S. by 2030. Stellantis, which operates around a dozen plants in Italy and employs around 50,000 workers, hopes to commission the plant in mid-2025.

"We are convinced that Stellantis should continue to be engaged in Italy and the gigafactory in Termoli which (Rome) will support with 369 million euro (US$420 million) of public money demonstrates this," Giancarlo Giorgetti, Italy's Minister of Economic Development, told the Il Sole 24 Ore newspaper.

He also confirmed that the government intends to reveal a support package to the tune of 1 billion euro (US$1.1 billion) for the country's ailing automaking industry. A significant portion of the funding is expected to go towards expanding the conversion of traditional car plants towards electric vehicle/hybrid vehicle production and financial incentives for customers to purchase lower emission cars. There will also be support for existing combustion-engine plants which, like most of Europe's car sector, have been hit badly by chip shortages brought about by the COVID-19 pandemic, in the past year. Europe's car industry is suffering its worst period since the early 1990s. According to the European Automobile Manufacturers' Association (ACEA), new car registrations in the EU, U.K. and EFTA in January were down 2.4% on January 2021. The only bright spot has been sales of EVs which are accounting for "almost 1 in every 5 new cars sold across the European Union", it stated.

Giorgetti added: "Helping only on the electric side would be doing a favour to foreign carmakers. We also need to encourage purchases of cheaper vehicles by less wealthy people."

The Stellantis group aims to invest more than 30 billion euros (US$34 billion) by 2025 in electrification and software, claiming it will "maintain exemplary efficiency for the automotive sector, in particular with an investment efficiency that is 30% higher than the industry average." It said all 14 of its vehicle brands--including Fiat, Peugeot, Dodge, Jeep, Ram, and Opel--will offer fully electrified vehicles. Its plan is for all EVs to be built on four electric platforms and have driving ranges of 500 to 800 kilometers (km) (300 to 500 miles) on a single charge and a fast charging capability of 32km (20 miles) per minute. It also aims to electrify its commercial vehicle ranges.

Italy's metal workers' unions and a lobby group have warned that Italy's transition to EVs will result in up to 70,000 job losses from the sector's current headcount of 278,000, unless the government agrees on significant financing support. Italian vehicle production has historically fallen from a high of more than 1.8 million units in 1997 to 700,000 last year--of which less than 500,000 were cars.

Industrial Info is also tracking a number of Stellantis projects in the U.K. as part of the company's proposed £100 million (US$136 million) investment into the Ellesmere Port plant, which will become the company's first manufacturing site dedicated to battery electric LCV and passenger car models for Vauxhall, Opel, Peugeot and Citroën.

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