MILAN, Italy: Stellantis announced this week that it will begin producing hybrid vehicle components at its Termoli plant in southern Italy, a site previously designated for electric vehicle (EV) battery production.

The facility will start manufacturing electrified dual-clutch transmissions (eDCT) in 2026, a key part of the company's strategy to expand its hybrid lineup.

The Termoli plant, which currently produces engines, was initially set to be transformed into an EV battery gigafactory by Automotive Cells Company (ACC), a joint venture led by Stellantis with Mercedes-Benz and TotalEnergies as partners. However, plans for the Italian and German battery plants have been on hold since last year, as ACC re-evaluates its strategy amid slowing demand for EVs.

A spokesperson for ACC confirmed that investment plans for the Italian and German sites are still under review and that no final decision will be made before June. This follows recent remarks from TotalEnergies' CEO, who suggested that ACC should focus exclusively on its French gigafactory, raising concerns that the Termoli and German projects could be scrapped.

Despite Stellantis' new plans for hybrid component production at Termoli, the company made no mention of ACC's battery project in its announcement. Instead, it emphasized the plant's role in boosting hybrid vehicle production, setting an annual target of 300,000 eDCT units. Termoli will become the third Stellantis site to manufacture these transmissions, alongside facilities in Mirafiori, Italy, and Metz, France.

Italy's major metalworker unions welcomed the news, stating that eDCT production would secure jobs for about 300 of the plant's 1,800 employees. However, Gianluca Ficco of the UILM union urged Stellantis to clarify its long-term vision for Termoli, including whether the gigafactory project would proceed.

In addition to expanding eDCT production in Termoli, Stellantis will increase manufacturing capacity for key hybrid components at its plants in Sint-Truiden, Belgium, and Metz. A new assembly line for these components will also be installed in Metz.

Meanwhile, Stellantis is moving forward with a separate plan to build a 4.1 billion euros ($4.3 billion) battery gigafactory in Spain in partnership with Chinese battery maker CATL.