Mercedes and Stellantis pause EU battery factories, may switch to LFP cells
Mercedes and Stellantis have stopped work on their joint European EV battery factory projects, and are reassessing which direction to move forward with the possibility of shifting to cheaper lithium iron phosphate cells.
Mercedes and Stellantis first partnered to form a battery cell joint venture in 2021, calling the venture the Automotive Cells Company (ACC).
Earlier this year, ACC raised $4.7 billion to build four factories, planning to raise around 7.6 billion total Euros to build the factories.
The joint venture has already opened one factory in Douvrin, France.
But today Bloomberg reports that work has stopped on ACC’s upcoming factory in Germany, and prep work has paused on a factory site in Italy.
While this work has stopped, ACC hasn’t made a final decision what to do with these sites yet. The company says that it plans to stay flexible with its speed of investment, reacting to market trends, and will decide around the end of the year what to do with these sites.
Bloomberg reports that the head of ACC, Yann Vincent, said that demand for EVs has slowed in Europe – despite that EV sales rose 14.8% year over year in April, faster than non-electrified car sales rose, though slower than conventional (non-plug-in) hybrids. He says that growth is mostly expected in mass-market segments, something which many Western EV makers have heretofore failed to target, though Chinese automakers are starting to, especially in Europe.
Previously, Mercedes had committed to go all-electric by the end of the decade, but in February said that it would continue building poisonous, climate-change-causing gas vehicles “well into the 2030s”, despite the necessity that the world stop building those vehicles as soon as possible.
Electrek’s Take
I’m of two minds on this one. First, the decision to pause building EV battery factories makes no sense. We need more EVs, and we need them faster than we’re getting them. The transition to sustainable transport needs to be accelerated, not decelerated, and we don’t get to acceleration by pausing and waiting.
And reacting to market trends doesn’t make a lot of sense – factories take a while to build (ACC says the first cells wouldn’t come out of its Germany site until mid-late 2027), so if you wait to build one until after the trend has already started, you’ve already missed the trend. This is how Tesla gained the dominant position in EVs that it has today, because automakers refused to see the trend towards EVs for many years before finally pulling up their pants (which they’re still waffling over).
But, this pause could end up having a positive outcome anyway, as ACC is reportedly thinking about switching to cheaper LFP cells.
LFP cells have a number of benefits – lower cost, higher durability, and simpler mineral sourcing – but have lower energy density than NMC cells. As a result, most cars have focused on NMC (to feed a public that thinks they need more range than they do), but we’re starting to see more entry-level models equipped with LFP cells to help bring costs down.
These LFP cells have been used to particularly positive effect in low-cost Chinese autos, which has helped them to undercut Western automakers on price. If ACC sees growth coming from the mass market side, then LFP cells would be a reasonable choice. The battery is the most costly part of an EV, and cutting costs there can help a lot.
Further, with the EU threatening tariffs (and the US already implementing them), onshoring LFP production would be necessary if ACC wants to target mass market cells. As much as these tariffs are a dumb idea, one problem is that they might lull domestic automakers into a false sense of security. If the automakers actually do use the opportunity to build a new industrial base, then at least that negative is removed and the tariffs will have had their “intended” effect.
So ACC should continue forward with their plans, rather than pausing based on false reports of dropping sales. But a switch to LFP does seem prudent, especially when most LFPs are currently made in China, and when cost is one of the main challenges with EV production in this day and age.
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Leading electric vehicle analyst, author, and industry thought leaders Loren McDonald and Bill Ferro stop by Quick Charge to discuss EV Adoption’s acquisition by Paren, the “crisis” of EV charging reliability, and the real state of the EV market.
Depending on who you listen, EVs are either driving brands to record growth and are about cross that critical 10% of the overall market nationwide, or the future is bleak, the market is down, and EVs just aren’t selling. What’s really going on? Loren and Bill (probably) have some answers.
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Read more: All my favorite EVs, racecars, and robots from Electrify Expo Austin.
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Chevy EV owners in Texas who have Reliant as their electric utility can now charge for free at night with renewable energy.
Over 150 Chevrolet dealerships across Texas are now offering the Reliant Free Charge Nights plan to new EV buyers. With Free Charge Nights, customers can offset their charging costs by receiving credits for electricity used between 11 pm and 6 am. The plan is powered entirely by renewable energy, thanks to the purchase of renewable energy certificates (RECs).
Rasesh Patel, president of NRG Consumer, says the plan is about making power personal: “We’re excited to help Chevrolet EV drivers offset the cost of charging their vehicle all while having access to a renewable electricity plan.”
This collaboration aims to make EV adoption more appealing by making charging cheaper and greener. GM Energy’s chief revenue officer, Aseem Kapur, emphasized that partnerships like this help build the ecosystem needed to support an all-electric future: “The Reliant Free Charge Nights plan is a great example of how an automaker and an energy company can work together to make EV adoption an easy decision.”
Existing Reliant customers can also sign up for the Free Charge Nights plan. To get started, Chevrolet EV owners need to designate their vehicle on the GM Energy Smart Charging Portal before enrolling in the plan.
Reliant Energy, a subsidiary of NRG Energy, serves over 1.5 million customers in Texas, making it one of the largest electricity providers in the state.
Read more: Texas to get 1 GW AI-powered virtual power plant, enough to power 200,000 homes
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Texas is about to get a major power boost – a new AI-powered virtual power plant (VPP) delivering capacity equivalent to 200,000 homes during peak demand.
NRG Energy is teaming up with Renew Home to bring nearly 1 gigawatt (GW) of capacity to the Texas grid by 2035, aiming to make it more resilient while helping residents save on energy costs.
The new VPP will rely on hundreds of thousands of smart thermostats and other connected home devices, making use of AI technology provided by Google Cloud. These devices, like Vivint and Nest smart thermostats, will be offered to eligible customers at no cost. By automating HVAC adjustments, they help shift energy use to when electricity is cheaper, cleaner, and less strained.
NRG and Renew Home have big plans for the VPP. Starting in spring 2025, the companies plan to roll out the program across Texas, installing these smart thermostats in homes served by NRG’s retail electricity providers. Eventually, they plan to add home battery storage and EVs to expand the power plant’s capabilities.
Texas has faced record-breaking energy demands, with peak usage hitting 85 GW in 2023. As the state’s population grows and extreme weather becomes more frequent, VPPs like this one could play a key role in stabilizing the grid. VPPs aggregate a lot of small-scale energy resources, from smart thermostats to home batteries, and use them to help balance supply and demand during times of high stress on the grid.
This nearly 1 GW VPP will be one of the largest of its kind in Texas. NRG’s president of consumer operations, Rasesh Patel, calls it a “pivotal step” for improving customer experience while making Texas’ energy infrastructure more sustainable and resilient.
In addition to Renew Home, NRG is working with Google Cloud to maximize the power plant’s effectiveness. Google Cloud’s AI and analytics tools will help predict weather conditions, forecast renewable generation, and optimize energy usage, all of which will help make energy management smoother for both customers and the grid.
Ben Brown, CEO of Renew Home, said:
NRG’s commitment to creating a more resilient and sustainable energy future while also making electricity bills more affordable makes them an ideal partner for co-developing this unique VPP program.
This initiative raises the bar for future-proofing our electricity infrastructure and delivering cost savings to customers.
Read: Chinese solar giant Trina sells its Texas factory a week after it opens
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