Stellantis stock experienced a historic drop Friday following a meaningful write-down linked to revised electric vehicle strategy, signaling broader turbulence within the automotive sector’s transition to EVs. The company’s decision to scale back ambitious battery production plans in Italy and Germany, thru it’s joint venture ACC, reflects a recalibration amid softening demand and a fiercely competitive market. This move comes as Europe aims to establish a stronger, independent EV battery supply chain to rival Asian dominance, and raises questions about the pace of EV adoption and investment across the continent [[1]].While Stellantis maintains a commitment to its existing facilities in Termoli, the restructuring underscores the challenges facing automakers navigating this evolving landscape and the potential for workforce impacts [[3]].
Shares of Stellantis plummeted on Friday, experiencing a record 25.2% decline after the Franco-Italian automaker announced a roughly €22.2 billion write-down related to a slowdown in its electric vehicle development plans. The dramatic drop underscores investor sensitivity to the evolving landscape of the EV market.
ACC, a joint venture between Stellantis, Mercedes-Benz, and TotalEnergies, has scaled back its European expansion plans, abandoning projects in Italy and Germany.
Originally, ACC envisioned establishing three gigafactories in each of France, Germany, and Italy, with each facility boasting an annual production capacity of 8 gigawatt-hours. However, the company now intends to focus its efforts on France, where it plans to build two blocks with capacities of 13 and 15 gigawatt-hours, respectively.
The decision to halt investments in Termoli, Italy, and Kaiserslautern, Germany, comes amid weakening demand for electric vehicles, according to the company. ACC confirmed that the two projects have been suspended since May 2024 and that the conditions for their continuation are unlikely to be met.
ACC has already commenced production at its French facility. The company is now exploring alternative scenarios for its expansion strategy.
The move highlights the challenges facing Europe’s efforts to build a robust domestic battery industry and reduce its reliance on Asian suppliers and technologies. The continent is striving to secure its position in the rapidly growing EV supply chain.
Stellantis stated that it remains committed to manufacturing gearboxes and motors at its Termoli plant. The company also intends to offer alternative employment opportunities within the group to current ACC employees at the affected sites.
Source: Reuters
