Automotive Cells Company Considers US Factories Under IRA, Says President

The day after the inauguration of the first French gigafactory, the president of Automotiv Cells Company indicated that some of the next 9 factories of the company could emerge from the land across the Atlantic, under the impulse of the IRA.

Automotive Cells Company (ACC) is already giving in to the siren song of the Inflation Reduction Act (IRA). The president of the joint venture of Stellantis, Mercedes-Benz and TotalEnergies was the guest of Good Morning Business this Wednesday morning, the day after the inauguration of the first French electric battery factory in Pas-de-Calais. On this occasion, Carlos Tavares had indicated that he was thinking “of new factories in the United States”.

“We already have two [en Amérique du Nord]: one in Canada which is the subject of discussions with the Canadian government, another in the United States, explained the general manager of Stellantis. We know that we are going to need a third or even a fourth in the United States. Of course the American IRA creates very favorable conditions for these investments.”

On BFM Business, Yann Vincent reacted to these statements on the IRA, whose generous subsidies have been seen as a threat to European industry since the plan was announced last August. The ACC boss confirmed he was looking at the US market because of its “Europe-like” growth prospects as nine factories equivalent to Billy-Berclau’s are due to see the light of day:

“Settling there given the IRA measures becomes particularly interesting.”

Produce to consume locally

At the microphone of France Inter this morning, Bruno Le Maire was nevertheless delighted with this mega-factory as “proof that we can fight against China and the United States and that we must invest massively in the vehicle electric”.

The day before in Hauts-de-France, the Minister of Economy and Finance had recalled the need for a “European IRA which defends our industrial interests” in order to avoid “an industrial haemorrhage vis-à-vis the States -United”. It is for this reason that Yann Vincent specified that he wanted to correlate the production sites with the targeted markets as part of his implementation strategy:

“We are looking at this opportunity [l’IRA] to produce for American consumption, not with a view to re-exporting production to Europe […] The logistics of an electric battery is extremely expensive and transporting an electric battery from China to Europe obviously costs more than producing and consuming it in Europe.”

In addition, the chairman of ACC insisted on the competitiveness objective set by the two manufacturer shareholders, Mercedes and Stellantis. “The factory we have built is the best in terms of cost and schedule, he explained. We have a labor cost which is against us compared to countries like China but which ultimately has a limited share in the cost of the battery. Finally, as long as we manage to control the cost of energy, we could have a competitive advantage compared to certain Asian countries.”