The government has clashed repeatedly with Stellantis in recent months as the carmaker shifted production to lower-cost sites in other countries.

Public funds originally allocated to ACC will be shifted to other green energy initiatives after Italy says it failed to provide a clear timetable for the development of the plant.

Italy's government will reallocate some 200 million euros ($222.78 million) in European Union funds it had previously earmarked for a plan by Stellantis to build a battery-making plant in Termoli, officials said on Tuesday.