BERLIN -- Opel will receive a 437 million euro ($518 million) government grant for its battery cell factory in Kaiserslautern, Germany's economy ministry said on Thursday, as part of a wider European initiative to create a homegrown battery industry.
The market for batteries destined for electric vehicles is dominated by Asian manufacturers, but the European Union, and Germany in particular, are eager to create European battery giants as the transition to cleaner transport gathers pace.
Opel/Vauxhall recently announced that it would become an all-electric brand by 2028. The Stellantis brand this week said it would launch a full-electric version of the Astra compact in 2023, giving it three full-electric passenger vehicles as well as a range of passenger and commercial vans.
Since 2019, Berlin has committed to invest a total of 3 billion euros in battery cell production projects, which is expected to lead to 13 billion euros of private investment and 10,000 jobs.
For Opel's Kaiserslautern plant, 51 million euros will come from regional funds from the state of Rheinland-Pfalz, according to the ministry statement, with the rest from federal coffers.
The funds come on top of 2 billion euros invested in the project by Automotive Cells Company, a joint venture of Opel, parent company Stellantis and the Saft division of French energy giant Total.
The 24 gigawatt/hour (GWh) capacity factory, plans for which were first announced in January 2020, is expected to produce battery cells for about half a million EVs per year, with production scheduled to start in 2025.