French supermajor Total has set the seal on a €5 billion ($6 billion) plan with automotive group PSA to build two lithium-ion (Li-ion) battery gigafactories that will be ramped up to manufacture enough units for 1 million electric vehicles (EVs) by the end of the decade.

Working under the banner of the Automotive Cells Company (ACC), the partners aim to produce EV batteries of the “highest technological level in terms of energy performance, autonomy, recharging time and carbon footprint” at two plants — Douvrin, France, and Kaiserslautern, Germany — scaling up capacity from 8 gigawatt-hours in 2023 to 48GWh by 2030.

Total said that through its subsidiary Li-ion battery-maker Saft it would contribute expertise in R&D and industrialisation to the joint venture – first announced in January – while PSA would provide knowledge of the automotive market and its experience in production.

“The creation of ACC illustrates Total's commitment to meet the challenge of climate change and to develop as a broad energy company, a major player in the energy transition, by continuing to provide affordable, reliable, and cleaner energy,” said Total chief executive Patrick Pouyanne.

“Our ambition is to leverage the recognised expertise of Saft in batteries and the industrial know-how of our partner PSA to meet the strong growth of electric vehicles in Europe.

Carlos Tavares, chairman of Groupe PSA — which owns Peugeot, Opel, Citroen, DS Automobiles and Vauxhall — stated: “The construction of the European battery consortium that we wished for is now a reality.

“This new step is consistent with our central purpose: to offer citizens clean, safe and affordable mobility, and gives [us] a competitive advantage in the context of growing sales of EVs. ACC takes PSA further along the road to carbon neutrality.”

Total said the whole project will "mobilise and investment [of] more than €5 billion" and that the project "benefits from the financial support of French and German public authorities representing €1.3 billion".

Yann Vincent has been named chief executive of ACC, with Ghislain Lescuyer appointed chairman.

The European EV battery market is forecast to grow 15-fold through to 2030 to reach some 400GWh.

French bank BNP Paribas last year calculated total expenditure on gasoline in the mobility sector over the next 25 years at $25 trillion, whereas the comparable expenditure on renewables and grid infrastructure for mobility is only $4.6 trillion to $5.2 trillion.

(This article first appeared in Upstream's renewable energy sister publication Recharge on 4 September, 2020.)