AThe French Economics Minister Bruno Le Maire once historicized it as the “Copernican revolution by two Galileos, France and Germany”, having re-established European industrial policy in 2019 with his then German counterpart Peter Altmaier (CDU). This included the realization that future technologies such as “green” hydrogen technology, electric car batteries or semiconductors could not exist without partial public funding.
Almost four years later, the new industrial policy continues to take shape. The ceremonial opening of the first Franco-German battery cell factory is planned for this Tuesday, which will be attended by several French ministers, Federal Transport Minister Volker Wissing (FDP) and Italy’s “Minister for Companies and ‘Made in Italy'”, Adolfo Urso, in Billy-Berclau in northern France to be expected. The CEO of Mercedes, Ola Källenius, has also confirmed his participation after his trip to the Formula 1 race in Monaco, the same applies to the bosses of the car manufacturer Stellantis, Carlos Tavares, and the energy group Totalenergies, Patrick Pouyanné.
Through their joint venture, the Automotive Cells Company (ACC), founded in 2020, Mercedes, Stellantis and the Totalenergies offshoot Saft are investing around 2 billion euros in the new plant. It is the first of three locations where the ACC wants to produce battery cells for electric cars, although according to a spokesman it is still unclear which automaker will source what quantities, and in addition to Mercedes and European Stellantis brands such as Citroën, Opel and Fiat also the Delivery to third parties is possible. A second plant is being built in Kaiserslautern, where the opening is scheduled for 2025, and a third in Termoli, Italy.
Reduction of dependency
According to the ACC, via the EU’s IPCEI program, which defines “important projects of common European interest”, it has received 850 million euros in support from the French state for its overall activities in France. In addition to the new factory, these included the construction of the company headquarters, a development center and a pilot factory in the south-west of the country.
While battery cells for electric cars have recently been manufactured in Germany by the Chinese company CATL, Billy-Berclau is the first to do so in France. The ACC intends to employ 2,000 people in the small community in the Pas-de-Calais department, which has been structurally weak since the decline of coal mining, the textile and steel industries. In the last presidential election, the majority of voters here voted for the right-wing populist Marine Le Pen, whose adopted home of Hénin-Beaumont is a 20-minute drive south-east of the new factory.
For Paris, the reindustrialization of the north-east is a means of regional policy, but the subsidization of battery cell production is also aimed at reducing dependence on China, according to the French Ministry of Economic Affairs. That is why other links in the value chain are also being promoted, such as the extraction of lithium in Alsace and in the Massif Central.
Tesla could also settle there
President Emmanuel Macron has announced the goal of producing two million electric cars a year on French soil by 2030. The battery cell production in Billy-Berclau plays an important role: The annual capacity of the first block is 13.4 gigawatt hours, more than one and a half times that of the CATL plant near Erfurt. By 2030, the other two blocks are scheduled to go into operation and around 40 gigawatt hours will be achieved. That’s enough for 800,000 vehicles.
Three more battery cell factories are to be built in France with state aid: in Dunkirk by the French start-up Verkor and Prologium from Taiwan and in Douai by Envision AESC from Japan. The medium-term domestic demand should be exceeded and an export will be possible, it said in Paris.
Since the investments are all concentrated in the north-east of France, where the plants of car manufacturers such as Renault and Toyota are also located, there is talk of a “Battery Valley” based on Silicon Valley. Tesla could also settle there: Elon Musk recently announced “significant investments in France”.
