Not for You: Italy rescinds EU funds earmarked for Stellantis

Use it or lose it, right? The decision by Stellantis to pause on new construction of a so-called Gigafactory in Italy has resulted in that country’s government deciding to use funds previously earmarked for that endeavor elsewhere.

According to reports from across the pond, the Italian government is clawing back some 200 million euros (about $220 million USD) previously planned for a project that was going to be led by Stellantis. The development in question is a battery-making facility which was once planned for a region in eastern Italy, all under the banner of a joint venture called ACC in which Stellantis is a major partner. Mercedes and Total Energy are also shareholders.

In fact, ACC had designs for three of these facilities in Europe – one each in France and Germany plus the Italy plant mentioned in this post. Announcements were made earlier this year about the halting of works on the German and Italian shops amid a shift in EV demand plus stiff competition from other markets. 

"We have of course to schedule the capacity increase in accordance with the cell's (demand) ramp up," Stellantis CEO Carlos Tavares said on Tuesday in Italy. "As soon as EV sales increase in Europe, as soon as I see that I need more capacity, I will trigger the investment of the two additional plants in Germany and Italy," Tavares explained.

To be clear, it seems the EV market continues to grow in these and other regions – just not at the rapid-fire pace of the last couple of years. Anyone with half a grain of sense should have known the huge growth numbers were unsustainable; a doubling of market share, for example, is a lot easier at 2 percent than at 20 percent.

As for the 200 mil which has now vanished, it isn’t necessarily gone for good. Italian Industry Minister Adolfo Urso said that separate domestic state money could be earmarked if ACC is able to present a new industrial plan at a later stage. The original promise stemmed from the EU's post-COVID recovery pot for the support of investments consistent with Rome's energy strategy.

[Image: HJBC/Shutterstock.com]

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