PARIS, Dec 11 (Reuters) - Battery maker Automotive Cells

Company (ACC) is set to sign a new loan to finance the second

production block of its gigafactory in northern France, a

company spokesman said, as it ramps up output despite Europe's

sluggish electric vehicle market.

The loan, guaranteed by ACC's two main shareholders, car

makers Stellantis ( STLA ) and Mercedes-Benz Group,

is worth around 1 billion euros ($1.05 billion), two sources

familiar with the matter said, confirming a report by newspaper

Les Echos.

Stellantis ( STLA ) and Mercedes did not respond to requests for

comment. Smaller shareholder TotalEnergies declined to

comment.

The factory already operates one production block, with a

maximum capacity of 15 GWh. The second block of 13 GWh is

already under construction.

The ramp-up of ACC's France factory comes despite slow

growth of the EV market, which has led European peer Northvolt

to file for bankruptcy last month and raised questions about

other battery plants being built in Europe.

ACC said on Tuesday it planned to continue the ramp-up of

its plant in France making NMC batteries, following an

announcement by Stellantis ( STLA ) that it will build a factory in Spain

with China's CATL to make batteries using competing

LFP technology.

NMC, with a higher energy density but more expensive, is

suitable for larger, more high-end electric vehicles while LFP,

less dense but cheaper, is used in smaller cars. Both are

variants of lithium-ion.

ACC suspended plans for two other gigafactory projects in

Germany and Italy to reconsider the battery technology it will

use and will outline roadmaps for the plants in the first half

of 2025.

The construction of a third production block in France,

which would bring the total capacity of the site to 40 GWh, has

not yet been decided, the spokesman said.

($1 = 0.9521 euros)