France Inaugurates First Electric Car Battery Factory, Aims to Compete with China

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France celebrated the opening of its inaugural electric vehicle battery factory on Tuesday, marking a significant milestone in its pursuit to establish a thriving industry currently dominated by China. Situated in Billy-Berclau, this factory is the first of several planned facilities set to emerge within the next three years, creating a northern corridor dubbed "Battery Valley" to cater to the rapidly growing electric vehicle sector.

The "gigafactory" is operated by Automotive Cells Company (ACC), a joint venture comprising French energy giant TotalEnergies, Germany's Mercedes-Benz, and Stellantis, a transatlantic automaker that encompasses renowned brands such as Peugeot, Fiat, and Chrysler.

French Economy Minister Bruno Le Maire, present at the inauguration, drew parallels between the factory and the creation of Airbus, highlighting its potential to elevate Europe as a force in the aircraft manufacturing industry. He stressed the need for the European Union to assert its industrial prowess, emphasizing that China would not yield any concessions.

German Transport Minister Volker Wissing echoed this sentiment, expressing that the ACC factory, alongside two additional ACC plants planned for Germany and Italy, would ensure Europe's continued leadership in global progress.

Mercedes, Stellantis, and TotalEnergies, represented by their respective heads, also attended the event, underscoring the significance of this milestone for their companies.

The development of the battery industry is a central component of President Emmanuel Macron's "reindustrialization" strategy for France. Spanning an area equivalent to six football pitches, the ACC factory is poised to commence production this summer.

Europe is engaged in a race to bolster its battery and electric vehicle manufacturing capacities, prompted by the European Union's target to phase out the sale of new fossil fuel cars by 2035. The bloc has witnessed the announcement of approximately 50 battery factory projects in recent years, aiming to align with its objective of achieving climate neutrality by 2050.

The ACC factory is the first among four facilities scheduled to launch in the burgeoning "Battery Valley" located in the Hauts-de-France region. Another significant player, Sino-Japanese group AESC-Envision, is constructing a plant near Douai to supply French automaker Renault starting from early 2025. French startup Verkor plans to commence production at its Dunkirk facility by mid-2025. Taiwan's ProLogium has also selected the coastal city as the location for its first overseas factory, slated to begin production in 2026.

The French government has set a target of manufacturing two million electric vehicles annually by 2030, with the ACC plant expected to supply 500,000 vehicles per year by that time.

While France aspires to achieve self-sufficiency in battery production by 2027 and subsequently become an exporter, it faces challenges such as higher energy costs compared to China and the United States. China currently leads the world in electric car battery production and dominates the supply chain of raw materials necessary for their manufacturing. Europe also encounters strong competition from the United States, which provides significant subsidies to the sector through the Inflation Reduction Act, including $370 billion in clean energy incentives.

Out of the total investment of seven billion euros ($7.5 billion) for the ACC project, 1.2 billion euros were contributed through public funds. However, as Battery Valley anticipates employing over 20,000 individuals in the coming years, French labor unions express concerns regarding the potential impact of the electric vehicle industry on jobs. Recently, around 100 people staged a protest against the planned closure of a Stellantis site in Douvrin.

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