Europe's Battery Ambitions Suffer Fresh Blow as ACC Shelves German and Italian Gigafactories

Europe's faltering bid for battery sovereignty took another damaging turn this month after Automotive Cells Company, the continent's second-largest cell manufacturer, moved to permanently abandon two planned gigafactories — a decision its chief executive described as unavoidable given Brussels' failure to match industrial rhetoric with meaningful support.

ACC chief executive Yann Vincent said it would be "totally irresponsible" to proceed with factories in Kaiserslautern, Germany and Termoli, Italy, citing fierce Chinese competition and a lack of coherent policy backing from EU leaders. The Stellantis- and Mercedes-backed venture had paused both projects in 2024 to reassess their viability around lower-cost lithium iron phosphate technology. Italian trade union UILM said workers had already been told work at both sites had been permanently shelved.

The retreat compounds a bruising period for European cell manufacturing. Northvolt, once the bloc's flagship battery champion, filed for bankruptcy in Sweden last year after burning through billions in capital without achieving stable production at scale. Its 16 GWh Skellefteå plant is now being sold to US firm Lyten — an outcome that underscores how quickly European industrial ambitions can unravel.

Vincent warned that Asian players, particularly Chinese firms, already supply 99% of the market, leaving European carmakers' strategic independence in the hands of manufacturers such as BYD, CATL and LG. Meanwhile, ACC's operational gigafactory in northern France continues to ramp up more slowly and at greater cost than planned, further straining the company's finances.

The implications extend well beyond one company. Chinese battery overcapacity means cell prices in China are now roughly half what they are elsewhere, eroding the economic case for domestic European production. With over half of the continent's planned gigafactories already facing delays or cancellation, the window for Europe to secure a meaningful position in the global battery supply chain is narrowing fast.

For policymakers in Brussels, the ACC decision is an uncomfortable reminder that strategic intent without competitive industrial conditions produces little more than abandoned construction sites.