Italy to raise over €1bn in funds for battery gigafactory
Italy is looking to generate over €1 billion in investments to build an electric vehicle gigafactory with automaker Stellantis expected to play a major role.
The gigafactory is set to be partially funded by the Next Generation EU recovery fund, with at least €600 million of the cost to be covered by public funding, with private investment expected to help cement its completion.
Read more: Bosch opens €1bn Dresden chip plant, Merkel urges "catch-up"
Three Italian government sources told Reuters backing by the EU could spur investments from industrial players to bring the total funds above €1 billion.
Stellantis are expected to operate a large share in the gigafactory and it may also have a hand in implementing the plan.
The automaker has met with officials five times in recent months to detail the plans, but sources claim the gigafactory will need to receive the green light from Brussels before production begins in earnest.
If successful, Italy's plans involve the 37 gigawatt-hour battery plant to create 500 new jobs by 2030.
The gigafactory will likely help Italy recover from the effects of the ongoing semiconductor shortage, which has hindered progress in vehicle electrification since it gripped a number of key sectors in January.
Recent reports indicate the shortage could last into 2022. However, a number of Asian suppliers have stated they may be able to meet demand for chips during the summer period.
Ending the shortage has become a priority for a number of major economies. In April, US President Joe Biden vowed to bring an end to the chip shortage by increasing domestic production.
Tech companies such as Nvidia and Intel, who are primarily known for making parts for PCs, have also announced they will be shifting production to create semiconductors for certain industrial sectors particularly affected by the shortage.
The EU has also set plans in motion to increase chip production despite criticism from third parties.
High demand from auto firms has caused European suppliers to increase demand for chips.
Battery maker Northvolt is expecting to increase production at its Swedish gigafactory by 50% in order to meet this demand.
Read more: Northvolt increases planned gigafactory capacity due to high demand
The company is also planning to construct an additional two European gigafactories to meet the 150GWh goal, one of which may be in Germany.
Stellantis currently has two gigafactory projects in the pipeline - located in France and Germany - representing investments of around €5 billion.
Tesla is also building the world's largest battery gigafactory in Germany, already operating similar plants in the US.
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