Carmakers are pouring billions into producing EV batteries

Stellantis is developing a new Indiana facility, and other automakers are aggressively investing in the production of these critical components for electric vehicles in the United States.

Stellantis, the business in charge of Jeep, Chrysler, Dodge, Ram, Fiat, and Alfa Romeo in the United States, stated on May 24 that it will collaborate with Samsung to establish a new $2.5 billion electric car battery production plant in Kokomo, Indiana. Stellantis wants to sell five million battery-electric vehicles per year by 2030, but it will need a significant boost to get there; the worldwide company presently does not sell any electric vehicles in the United States.

The Kokomo location is convenient to many of Stellantis' midwestern car assembly operations, as well as the company's supply base. Construction will commence later this year, with manufacturing capacity available by 2025. According to the corporation, the new assembly factory will create around 1,400 new employment and will be managed as a joint venture with brand partner Samsung.

“Just under one year ago, we committed to an aggressive electrification strategy anchored by five gigafactories between Europe and North America,” Stellantis CEO Carlos Tavares said in a release. “Today’s announcement further solidifies our global battery production footprint and demonstrates Stellantis’ drive toward a decarbonized future outlined in Dare Forward 2030.” 

So, how do Stellantis' aspirations compare to what's actually happening in the EV production landscape?

Tesla now operates the world's biggest EV battery plant, the Gigafactory, outside of Reno, Nevada, in collaboration with Panasonic. Giga Nevada, which launched in 2016, presently manufactures battery packs for several Tesla automobiles.Tesla planned and built the $5 billion complex, including roughly $1.5 billion in state subsidies and deferred taxes. The facility will not only manufacture new Tesla 2170 nickel manganese cobalt lithium ion battery cells (21mm diameter, 70mm length), but it will also recycle existing cell components into new battery packs. Tesla also manufactures its 4680 batteries in the recently established Giga Texas plant near Austin, albeit this plant's primary purpose is vehicle assembly and will purportedly be the home of Cybertruck production if that vehicle is developed.

Other automakers are also working in this subject. General Motors is collaborating with LG to establish its own battery facility in Lansing, Michigan. Similarly, Ford is collaborating with SKI to establish an EV battery facility in southeast Michigan. Volkswagen is considering building a new battery plant near its Chattanooga, Tennessee, manufacturing base. Hyundai is investing $5.5 billion in the construction of a specialized electric car and battery facility south of Savannah, Georgia.

Stellantis has announced the development of a $4.1 billion joint venture factory in Canada with LG. Rivian, a relative newcomer, is planning to expand its operations with a new $5 billion factory outside Atlanta, Georgia for battery manufacture and car assembly. When it comes to investing in the future of vehicle manufacture, these new battery production facilities are simply the tip of the iceberg.

Many electric vehicle manufacturers obtain their battery packs from third-party providers such as A123, Panasonic, LG, Samsung, and Amperex. Stellantis already has agreements with Amperex, LG, and Samsung to develop battery packs for its global EV and hybrid products. Nonetheless, several manufacturers are following Tesla's lead and making their own batteries in standalone battery facilities. This strategy significantly reduces production bottlenecks and lowers cost per unit.

Stellantis' strategy to transition to an all-EV range is headed by its European brands, specifically Fiat, Citroen, Peugeot, and Opel. By 2030, the business aims to sell exclusively EVs in Europe and at least 50% EVs in the US market, with a separate plan for each of its automobile brands to accomplish this transition. According to Stellantis, it will have at least 75 BEV nameplates accessible internationally, with 25 of those available in the United States.

The company's first new battery electric vehicle, based on its Compass compact crossover, is set to join the US market in 2023 as a small urban Jeep. Jeep, of course, is now experiencing tremendous success with its plug-in hybrid Wrangler 4xe versions, which are selling faster than they can be manufactured. Jeep was rebranded with the motto "Zero Emissions Freedom" during last year's Stellantis EV Day, and it appears that the business is ready to deliver on that promise.

Stellantis' Chrysler brand has announced the return of the Airflow model after an 86-year absence as a premium electric crossover with a range of 350 to 400 miles. The new motto for the winged brand was unveiled last year as  “Clean technology for a new generation of families.” Similarly, Ram was rebranded as “Built to serve a sustainable planet” and performance-oriented Dodge now holds the tagline of “Tear up the streets, not the planet.”

This Kokomo factory will be one of five Stellantis EV battery factories across the world. The company's original plan was for the manufacturing of around 140 gigatonnes of battery storage, but this was increased to approximately 400 gigatonnes as demand and markets shifted. Stellantis will not only require all five of these units to accommodate rising EV demand, but it will also continue to acquire battery packs from third-party providers.
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