France opens first car battery gigafactory in milestone for 'Made in Europe' push

Factory in Billy-Berclau first of several planned in French 'electric valley'

The factory in Billy-Berclau is expected to employ 2,000 people by 2030. Reuters

France on Tuesday opened its first factory for electric car batteries, hailed as a milestone in its quest to bring technology to Europe.

The gigafactory in the north-eastern town of Billy-Berclau is the first of several planned in France’s “electric valley”.

It is run by a consortium including Germany’s Mercedes-Benz and US conglomerate Stellantis, whose brands include Citroen, Opel and Peugeot.

The group, known as the Automotive Cells Company, is backed by the governments of France, Germany and Italy.

European countries and French President Emmanuel Macron in particular are pushing a “Made in Europe” credo to make the continent less reliant on the US and China in key industries.

The EU currently relies on China for many clean tech components such as electric car batteries and solar panels.

Although the EU maintains it is not seeking a total decoupling with China, leaders are keen to diversify after the war in Ukraine exposed Europe’s reliance on Russia for fossil fuels.

Despite the political enthusiasm, planned gigafactories in Europe have run into various difficulties and a UK company, Britishvolt, went into administration in January.

Europe has also objected to vast subsidies being offered to US clean tech companies under President Joe Biden’s $369 billion Inflation Reduction Act.

“The race is to determine who will lead in decarbonisation and who can stay on top amongst global competition,” Mercedes chief Ola Kallenius said at an opening event for the French factory on Tuesday.

The new €850 million ($912.2 million) campus “is a key part of our shift into the next stage of this race for both sustainability and for Europe’s competitiveness”, Mr Kallenius said.

The factory in Billy-Berclau is expected to employ 2,000 people by 2030.

The company intends to build more factories in Germany and Italy by 2026.

It is hoped that production from the three factories could reach 120 gigawatt hours of battery storage by 2030. Global demand for electric car batteries was 550 GWh last year and is expected to grow significantly.

The plan for three sites “illustrates our commitment to European industrial sovereignty in a strategic sector that is currently dominated by competition from Asia”, said the group’s chief executive Yann Vincent.

“All ACC employees are committed to contributing to the ecological transition of transport through the production of innovative batteries.”

Taiwan's ProLogium and China's Envision AESC have also announced plans to build gigafactories in France's northern region near the port of Dunkirk.

Electric cars are key to Europe’s ambition to slash its carbon emissions to net zero by 2050.

The EU has a plan to ban the sale of new cars with combustion engines by 2035, with electric vehicles expected to fill most of the gap.

Germany has lobbied for synthetic e-fuels to remain in the frame beyond that date. Britain plans to ban the sale of new petrol and diesel cars by 2030.

Electric cars made up a record 18 per cent of new vehicle registrations in the EU last year, up from 11 per cent the year before.