By Olivia Bugault

Total SA (FP.FR) said Thursday that it plans to create a joint venture with Peugeot SA (UG.FR) and its brand Opel to produce electric-vehicle batteries in Europe.

Through its subsidiary Saft, the oil-and-gas company intends to start developing batteries with its partner in 2023.

Total said the program will require nearly 5 billion euros ($5.5 billion) in investment in total, including the construction of a pilot plant that should start to operate in mid-2021 in France and will cost EUR200 million. Later on, they plan to build a second plant in Germany and both sites should represent a combined production capacity of one million batteries a year by 2030, Total said.

"Total and Groupe PSA acknowledge the support of French, German and European Union authorities for the project, expected to receive nearly EUR1.3 billion in public funding during its development," Total said.

The joint venture, named Automotive Cell Company, will be equally owned by Saft and Peugeot with Opel; however, Saft's share will decline to 33% during the commercial phase, it said.

Write to Olivia Bugault at olivia.bugault@wsj.com

(END) Dow Jones Newswires

January 30, 2020 07:40 ET (12:40 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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