Stellantis and Mercedes-Benz raise $4.7 billion to build 4 new gigafactories

In a huge push to give European automakers a fighting chance over China in the EV sector, Stellantis and Mercedes-Benz have raised nearly €4.4 billion to build four new EV gigafactories across the European Union in the coming years.

A press announcement this week said that the companies, along with Total Energies, have pulled off one of the largest debt fundraising operations ever carried out in the European auto sector. They expect to raise about €7 billion to build the factories for their co-owned battery maker ACC, which currently builds lithium-ion batteries in Billy-Berclau in northern France in a gigafactory that opened last year.

Future factory sites include one factory in Kaiserslautern, Germany and two in Termoli, Italy, as well as undisclosed location in France, reports Reuters. The factories are expected to create 6,000 new jobs in total.

Among the banks financing the deal include BNP Paribas, ING, Deutsche Bank and Intesa Sanpaolo, as well as the French and German governments chipping in about €1.3 billion. Italy, so far, hasn’t contributed to the funds.

Europe’s automobile industry – with Stellantis and Mercedes-Benz among the largest manufacturers in the EU – is trying to make some bold moves to fend off Chinese dominance in the EV sector, as well as its total control over the battery supply chain.

China has produced some 5.47 million BEVs in 2022, which accounts for more than half of the global EVs, reports Statistica, and BYD famously overtook Tesla in BEV sales the last quarter of 2023, with 526,000 sales compared to Tesla’s 484,500.

It’s expected that China will build 160 more gigafactories by the end of the decade, compared to Europe’s expected 36.

Last month, Swedish lithium-ion battery producer Northvolt raised an additional $5 billion, firmly locking in its position as one of Europe’s best-funded startups and recipient of the largest-ever green loan from the EU. The company is adding that cash to its pot of $13 billion in equity and debt to expand operations across the world, with plans to build batteries in Poland, Germany, and Sweden.