FRANKFURT -- Opel and French battery manufacturer Saft can move forward with a plan to build electric vehicle battery cells in Germany after the European Union approved the use of state aid for the project.
The companies plan to produce battery cells at Opel's components plant in Kaiserslautern in southwest Germany. The European Commission said Monday that state aid could be given for the project. It said battery production in Europe is of strategic interest.
In total, the Commission approved measures worth 3.2 billion euros ($3.53 billion) to support projects for r&d in battery technology in seven EU countries - Germany, France, Italy, Belgium, Finland, Poland and Sweden.
Opel said the decision will allow the joint venture to finish drafting a full business plan for the project.
"The project partners will now prepare to complete an examination of the project before a final decision is taken," Opel said in a statement.
Carlos Tavares, CEO of Opel parent PSA Group, had said in September that the project was dependent on receiving support from France and Germany, because otherwise its would be deeply loss-making.
The 3.2 billion euros in public funding is expected to unlock an additional 5 billion euros in private investments, the Commission said in a statement.