Plans for a large-scale automotive battery factory in Kaiserslautern, Germany, have been scrapped by the Automotive Cell Company (ACC), a joint venture between Stellantis, Mercedes-Benz, and Total Energies. The decision, announced recently, marks a setback for efforts to bolster domestic battery production in Europe and raises questions about the future of planned investments in the sector. The project, initially lauded as a “renaissance of battery production in Germany,” was expected to create approximately 2,000 jobs.
ACC stated that the German and Italian sites, previously put on hold in 2024, are no longer financially viable. The company will now focus on its Billy-Bercleau/Douvrin location in France as its “primary innovation hub.” This shift underscores the challenges facing new battery manufacturing ventures amid fluctuating demand and economic headwinds.
The cancellation comes as Stellantis recently reported significant write-downs totaling €22.2 billion and experienced a substantial decline in its stock price, factors contributing to the reassessment of ACC’s European footprint. The weakening demand for electric vehicles across Europe also played a role in the decision, according to company statements.
Both Germany and France had pledged a combined €1.3 billion in funding to ACC, with Germany committing approximately €437 million to the Kaiserslautern facility. The move has drawn criticism from German labor leaders, with Jörg Köhlinger, head of the IG Metall district in Frankfurt, calling the decision “irrational and irresponsible,” and warning it hinders the development of resilient supply chains.
“We have worked for years with works councils and IG Metall to support the establishment of the plant,” Köhlinger said. “We have reached innovative collective bargaining agreements to accommodate the company. And now ACC wants to sing its swan song.”
The planned factory represented a significant potential boost for the West Palatinate region, an area often described as structurally weak. Kaiserslautern, a city of around 100,000 residents, was seen as a strategically advantageous location due to its high-tech expertise, proximity to France, and transportation infrastructure.
“We deeply regret this decision,” a spokesperson for the city of Kaiserslautern stated. “Kaiserslautern would have been a perfect location due to its high-tech competence, its geographical proximity to France and its transport links. As a city, we have done everything we could to enable ACC to settle here.”
The city is now seeking clarity on the future of the site and has expressed interest in marketing the land to other potential investors. The implications for the allocated subsidies remain unclear, with ACC indicating it will discuss the situation with unions.
The setback for battery production in Germany coincides with BASF’s significant investment of €8.7 billion in a new integrated site in China, highlighting a broader trend of investment flowing outside of Europe. The news also arrives ahead of upcoming state elections in Rhineland-Palatinate, where the far-right Alternative for Germany (AfD) party has gained traction.
“Concerns about Germany’s economic future and fears about job security have recently favored electoral successes for the AfD,” noted political scientist Uwe Jun. “Such news, especially in structurally weak regions, will likely reinforce these fears among some voters.”
Rhineland-Palatinate’s Minister President Alexander Schweitzer has pledged to support Kaiserslautern in finding alternative uses for the site, designating it as a “turbo site” to expedite investment. The federal government has also indicated it will review all options regarding the funding commitments.
