The path that is driving automakers toward electric mobility is literally fundamentally changing the world’s reference industry. Stellantis, in this area is playing a leading role, using different types of approaches in each market in which it is present. In the United States for example, the company has recently made public major investments in gigafactories, while as far as the European market is concerned, in particular the Italian market, a similar project being held in Termoli has come to a halt these days.
Gigafactory Stellantis, U.S. and Europe are not progressing at the same speed
The Stellantis Group is resolutely continuing its transition to electric mobility. This is evidenced by the presence of the now completed gigafactory in Kokomo, Indiana, which was built in partnership with Samsung SDI. The initial investment for this plant was $2.5 billion and is expected to be in operation starting in the first quarter of next year. In addition, a second gigafactory is also being planned, also in collaboration with Samsung and also in the United States, although the exact location is not yet known. The latter is expected to come into operation starting in 2027. Therefore, this issue in America is proceeding smoothly, on the contrary, the same cannot be said for Europe, particularly Italy.
Stellantis has recently been in the news for the setback suffered at its production plant located in Termoli, Italy. This event was reportedly caused by a strategic reassessment strongly linked to the slowdown in demand for electric vehicles, which consequently generated the need for the company to optimize costs as much as possible. This is precisely why the joint venture between Stellantis and ACC decided to suspend work on the Termoli gigafactory, which was initially planned to use funds from the European Union.
Gigafactory Termoli, a part of $2.2 billion European puzzle
This facility, which stopped in Termoli, is part of a project that is much larger, namely one that would build three gigafactories for the European market, located in Germany, Italy and France. Termoli. And, as with the other two facilities, they were planned to be a benchmark for the creation of batteries for electric cars. The total investment on this occasion, amounted to $2.2 billion which involved Stellantis, ACC and the Italian government whose public contribution had exceeded $410 million. More than 200 million of this fund was from the EU”s Recovery Plan.
Relocation of funds planned for the Termoli Gigafactory
Now, to accommodate the decision made by Stellantis to stop the work, the Italian government has had to make the decision to place differently the funds that had been allocated for this initiative. The choice is dictated by the fact that public resources need to be used very efficiently, so at the moment it was decided to opt for something that could generate a much more immediate positive economic impact for the whole country.
Underlying it all, as anticipated, would be the evolution of the electric vehicle market. Stallentis, in fact, has noticed the sharp slowdown in demand, which has also combined with new technologies to produce very efficient batteries at lower costs. Therefore, the company’s choice is to recheck the relevant business strategy, to finally eliminate the risk of using technologies that may soon already be obsolete.
Tavares, recovery linked to electricity market performance
Although work has been suspended at the moment, Stellatis has not at all abandoned the gigafactory project in Italy. Also speaking was CEO Tavares, who confirmed that work will definitely resume when market conditions are more favorable for everyone. The occurrence, of course, generates a lengthening of the timeline for the construction of the facility, which will now have to wait for a revival of electric vehicles before restarting.
The Termoli gigafactory affair makes us realize how the performance of the auto industry is subject to many factors. In particular, the electric sector, which is experiencing various fluctuations, as well as technological innovation and industry policies, inevitably influence the choices of major manufacturers, those who are supposed to invest in the industry. Therefore, the search for new strategies is always on the agenda, and now Stellantis will also have to look for ways to be more flexible to certain situations.