Stellantis-backed ACC to expand French gigafactory

PARIS, Dec 11 (Reuters) - Battery maker Automotive Cells Company (ACC) is set to sign a new loan to finance the second production block of its gigafactory in northern France, a company spokesman said, as it ramps up output despite Europe's sluggish electric vehicle market.

The loan, guaranteed by ACC's two main shareholders, car makers Stellantis STLAM.MI and Mercedes-Benz Group MBGn.DE, is worth around 1 billion euros ($1.05 billion), two sources familiar with the matter said, confirming a report by newspaper Les Echos.

Stellantis and Mercedes did not respond to requests for comment. Smaller shareholder TotalEnergies TTEF.PA declined to comment.

The factory already operates one production block, with a maximum capacity of 15 GWh. The second block of 13 GWh is already under construction.

The ramp-up of ACC's France factory comes despite slow growth of the EV market, which has led European peer Northvolt to file for bankruptcy last month and raised questions about other battery plants being built in Europe.

ACC said on Tuesday it planned to continue the ramp-up of its plant in France making NMC batteries, following an announcement by Stellantis that it will build a factory in Spain with China's CATL 300750.SZ to make batteries using competing LFP technology.

NMC, with a higher energy density but more expensive, is suitable for larger, more high-end electric vehicles while LFP, less dense but cheaper, is used in smaller cars. Both are variants of lithium-ion.

ACC suspended plans for two other gigafactory projects in Germany and Italy to reconsider the battery technology it will use and will outline roadmaps for the plants in the first half of 2025.

The construction of a third production block in France, which would bring the total capacity of the site to 40 GWh, has not yet been decided, the spokesman said.

($1 = 0.9521 euros)

(Reporting by Gilles Guillaume. Additional reporting by Benjamin Mallet and Victoria Waldersee. Writing by Dominique Patton. Editing by Louise Heavens)

((dominique.patton@thomsonreuters.com;))