Automotive Cells Company to Manufacture Batteries in Europe

Groupe PSA/Opel and Total/Saft have signed an agreement for the creation of the joint venture Automotive Cells Company. The Automotive Cells Company will be a 50-50 Saft and Groupe PSA/Opel joint venture for the pilot production line. During the commercial production phase, Saft’s share in Automotive Cells Company will decline to 33%.

With this partnership, the parties are setting up a world-class player in the development and manufacture of high-performance batteries for the automotive industry from 2023.

Total/Saft will contribute its expertise in R&D and industrialization, and Groupe PSA its knowledge of the automotive market and its experience in production. The R&D centre in Bordeaux and the pilot site in Nersac (France) have already started in order to develop the new high-performance lithium-ion technologies. At the end of this R&D phase, mass production could be launched in two ‘giga-factories’, in Douvrin (France) and Kaiserslautern (Germany).

This project aims to:

• Respond to the challenges of the energy transition by reducing the environmental footprint of vehicles throughout the value chain in a desire to offer clean and affordable mobility to citizens.
• Produce batteries for electric vehicles that will be at the highest technological level in terms of energy performance, autonomy, recharging time and carbon footprint.
• Develop production capacity, essential to accompany the growth demand for electric vehicles in a European market estimated at 400 GWh by 2030, i.e. 15 times the current market.
• Ensure industrial independence in Europe for the conception and manufacture of batteries, with an initial capacity of 8 GWh, reaching a cumulative capacity of 48 GWh on both sites by 2030. It will represent 1 million electric vehicles produced per year, i.e. more than 10% of the European market.
• Position ACC as a major competitive player in supplying electric vehicle manufacturers.

This project benefits from the financial support of French and German public authorities representing EUR 1.3 billion. It received the European institutions agreement through an IPCEI project that testifies to the strategic importance of mobility for the energy transition. The whole project will mobilize an investment more than EUR 5 billion investment.

The technology used will offer the highest level of energy performance, both in terms of range and charging time, and a lower carbon footprint than that of the competition, setting a new standard in Europe.

The first phase of the project focuses on R&D, including building a pilot plant on the land of Saft’s Nersac facility. The plant is scheduled to start up in mid-2021 and represents an investment of 200 million euro. The project will generate around 200 high-skilled jobs in France’s Nouvelle-Aquitaine region to develop, qualify and commercially scale up new, high-performance lithium-ion batteries.

This first phase will trigger the investment decision for a large-scale production plant (8 GWh initially, rising to 24 GWh later on) in the northern Hauts-de-France region, followed by a second one of equal capacity in Germany, in order to reach 48 GWh of combined capacity by 2030. That would represent production of one million batteries a year, or around 10-15% of the European market. Ultimately, nearly EUR 5 billion will be required to complete this ambitious program.

“The construction of the European battery consortium that we wished for is now a reality. I would like to pay special tribute to the commitment of the Total/Saft and Groupe PSA/Opel teams who have made this project come true. This new step is consistent with our central purpose: ‘to offer citizens clean, safe and affordable mobility’ and gives Groupe PSA a competitive advantage in the context of growing sales of electric vehicles. Automotive Cells Company takes Groupe PSA further along the road to carbon neutrality,” Carlos Tavares, Chairman of Groupe PSA stated.

“The creation of Automotive Cells Company illustrates Total’s commitment to meet the challenge of climate change and to develop as a broad energy company, a major player in the energy transition, by continuing to provide affordable, reliable, and cleaner energy. Our ambition is to leverage the recognized expertise of our subsidiary SAFT in batteries and the industrial know-how of our partner PSA to meet the strong growth of electric vehicles in Europe. I would like to offer my encouragement to the teams who will be joining Automotive Cells Company to make this adventure a real European technological and industrial success,” Patrick Pouyanné, Chairman of Total commented.

European context

In 2019, the European Union set ambitious, binding targets to quickly expand the sale of electric vehicles. The European market for automotive batteries is estimated to reach around 400 GWh in 2030, or 15 times current needs, corresponding to more than seven million electric vehicles.

European automakers therefore need to plan their battery supply strategy, since batteries represent more than a third of an electric vehicle’s added value.

The project’s implementation is contingent on securing the approvals of the relevant antitrust authorities.

 

About Groupe PSA

Groupe PSA designs unique automotive experiences and delivers mobility solutions to meet all customer expectations. The Group has five car brands, Peugeot, Citroën, DS, Opel and Vauxhall and provides a wide array of mobility and smart services under the Free2Move brand. Its ‘Push to Pass’ strategic plan represents a first step towards the achievement of the Group’s vision to be “a global carmaker with cutting-edge efficiency and a leading mobility provider sustaining lifetime customer relationships”. An early innovator in the field of autonomous and connected cars, Groupe PSA is also involved in financing activities through Banque PSA Finance and in automotive equipment via Faurecia.

 

About Total

Total is a broad energy company that produces and markets fuels, natural gas and low-carbon electricity. Its 100,000 employees are committed to better energy that is more affordable, more reliable, cleaner and accessible to as many people as possible. Active in more than 130 countries, Total’s ambition is to become the responsible energy major.

 

About Saft

Saft specializes in advanced technology battery solutions for industry, from design and development to production, customization and service provision. For 100 years, Saft’s longer-lasting batteries and systems have provided critical safety applications, back-up power and propulsion for its customers. Saft’s innovative, safe and reliable technology delivers high performance on land, at sea, in the air and in space. Saft is powering industry and smarter cities, while providing critical back-up functionality in remote and harsh environments from the Arctic Circle to the Sahara Desert. Saft is a wholly-owned subsidiary of Total, a major energy player that produces and markets fuels, natural gas and low-carbon electricity.