French startup raises record sum to build gigafactory for car batteries

A French startup has raised more than 2 billion euros to build a gigafactory for electric car batteries, boosting Europe's efforts to develop a sector dominated by Asia.

The French government has set a target of producing two million electric vehicles per year in France by 2030. AFP

Verkor said that it had secured at least €850 million in private financing, a record fundraising effort for a French startup.

It came on top of some €650 million in public subsidies and a 600-million-euro loan from the European Investment Bank.

The plant is among a clutch of factories set to emerge in northern France under President Emmanuel Macron's "reindustrialisation" plan for the country.

Construction in Dunkirk has begun, with the factory due to begin production from mid-2025, producing 16 gigawatt hours (GWh) per year and creating 1,200 direct jobs.

"This new, historic fundraising for French Tech, with the support of France 2030 resources, is a bold sign of our ambition for reindustrialisation," Macron was quoted as saying in a company press release.

Elected officials and business leaders hope to turn the Hauts-de-France region into "Battery Valley" – the electric car industry's answer to Silicon Valley.

Race to phase out fossil fuel cars

Europe is racing to step up its production of batteries and electric vehicles as the European Union has set a 2035 deadline to phase out the sale of new fossil fuel cars.

In June, France launched its first battery factory for electric cars, a giant facility the length of six football pitches in Billy-Berclau owned by the Automotive Cells Company.

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The company is a joint venture between French energy giant TotalEnergies, Germany's Mercedes-Benz and Stellantis, which produces a range of brands including Jeep, Chrysler, Peugeot and Fiat.

Sino-Japanese group AESC-Envision is building a plant near the city of Douai which will supply French automaker Renault from early 2025.

And Taiwan's ProLogium is due to build a facility in Dunkirk, its first European factory, with output to start in 2026.

The French government has set a target of producing two million electric vehicles per year in France by 2030.

The lead investor in Verkor's capital increase was Australian fund Macquarie Asset Management, with French asset manager Meridiam also taking a stake.

(AFP)