Verkor took a decisive step this Thursday, September 14 for the installation in Dunkirk (North) of its battery gigafactory. The French start-up has completed a record fundraising round: the company, which will first supply Renault, announced that it had raised “more than 2 billion euros”, including the record amount of “at least 850 million euros”. ‘euros’ from private investors – the largest fundraising for a French start-up.
To this amount is added a public subsidy of around 650 million euros – subject to validation by the European Commission – as well as a loan of 600 million euros from the European Investment Bank. The State is subsidizing this project in the hope of boosting the European electric car industry in the face of Asian competition.
Quoted in a company press release, President Emmanuel Macron “congratulates” Verkor for this round of funding which “sends a strong signal about our ambition for reindustrialization”. “France is attracting, reindustrializing, decarbonizing its economy, creating jobs!”, he added on X (formerly Twitter).
The operation values the start-up at “more than a billion euros”, Benoit Lemaignan, co-founder and president of the company, told AFP. It was solemnly closed Thursday morning in Paris but the amount “could increase in the coming weeks”, according to the press release.
Founded in 2020, Verkor inaugurated its high-power battery pilot plant in Grenoble at the end of June and plans to open its factory in Dunkirk by 2025. 1,200 direct jobs are planned and an initial production of 16 gigawatt hours (GWh) per year. The first works are in progress. The completed financing “gives good visibility” to “build the factory, bring in the machines, assemble the team and get started”, explains the manager.
Verkor is closely monitored by the government. The factory should help the French automobile industry reach the objective of two million electric cars produced in France in 2030, after years of offshoring.
“Symbolic investment”
The funding round was broad: the Australian asset manager Macquarie Asset Management is “the main investor”, “with the support” of Meridiam, a French infrastructure specialist, which told AFP that it had paid €200 million. euros. These two entities will become the first shareholders, according to the Elysée.
Macquarie worked with Crédit Agricole Assurances, which also takes a significant share, confirmed its managing director Philippe Dumont. The Strategic Participation Fund (FSP), an alliance of seven French insurance companies, has also “made a major investment”, according to a press release from ISALT, the fund’s management company.
“It is a very symbolic investment of what the question of reindustrialization can be in France with a cutting-edge industry,” Nicolas Dubourg, general director of the FSP, explained to AFP. Several existing shareholders contributed again, notably the car manufacturer Renault, which had committed to buying three-quarters of Verkor’s production.
The batteries will be used in particular from 2025 in future Alpine models and in “vehicles in higher segments”, indicated the group’s boss, Luca de Meo, in the press release. “We are not intended to only supply Renault,” explained Benoit Lemaignan. This “gigafactory” responds to “a short-term market need” while building “an industrial tool which will last for decades”, he assures, describing batteries as “the oil of tomorrow in mobility” .
“Battery Valley”
Currently, the manufacturing of batteries and the refining of the materials they are made of are dominated by Asian groups. But Verkor is not alone in setting up in France: the Taiwanese manufacturer ProLogium has obtained a subsidy of 1.5 billion euros for its first factory, also in Dunkirk, with an opening planned for 2026.
One hundred kilometers south, in Douvrin (North), Stellantis, TotalEnergies and Mercedes have established the first French battery factory for electric cars, with their joint venture Automotive Cells Company (ACC). And Renault must open its own factory with the Chinese group AESC-Envision in 2024, also in the North, in Douai.
“We are in the process of creating a real battery valley” with four factories which “will allow France to be autonomous in terms of production”, welcomed the presidency. In Germany, the Chinese giant CATL launched the construction of a factory in 2019. Public support shows that Europe is “capable of supporting this industry” in the same way as the United States with the Inflation Reduction Act (IRA ), estimated the boss of Verkor. “We have nothing to be ashamed of” on the amounts, but “the speed of American start-up is probably significantly faster today”, judges Benoit Lemaignan. “American pragmatism must challenge us.”