Stellantis says construction on an electric vehicle battery plant will resume in Windsor, Ontario, after an agreement was reached in what had become a very public tussle with Canadian officials over investment support.
Details on the agreement were not immediately released, but the company, which is involved in the project through a joint venture with South Korea’s LG Energy Solution, said in a news release that a binding agreement was signed Wednesday.
That agreement “honours the commitments that were made by the Canadian government to level the playing field with the U.S. Inflation Reduction Act.”
Mark Stewart, Stellantis’ chief operating officer for North America, noted the significance of the production incentives tied to the 2022 law.
“The IRA fundamentally changed the landscape for battery production in North America, making it challenging to produce competitively priced, state-of-the-art batteries in Canada without an equivalent level of support from government,” Stewart said in the release. “We are pleased that the federal government with the support of the provincial government came back and met their commitment of leveling the playing field with the IRA. This collective effort enabled the deal to close and we are now resuming construction on the site in Windsor.”
Stellantis spokeswoman LouAnn Gosselin directed questions about the financial details of the agreement to the government. Messages seeking comment were sent to spokespeople for both provincial and federal officials in Canada.
Dong-Myung Kim, president and head of the Advanced Automotive Battery Division of LG Energy Solution, said “we are happy to finally move forward with building the country’s first major battery plant and be a central part of the local battery ecosystem.”
Perhaps significantly, the news was announced on the same day that Stellantis unveiled its first electric vehicle platform, the STLA Medium. That platform, which the company said would manage more than 435 miles per charge, is to be built at multiple locations in North America as well as in Europe.
Regarding the Windsor project known as NextStar Energy, Unifor — the union representing Canadian autoworkers — had said previously that the company wanted the Canadian government to match a $9.8 billion ($13.2 billion Canadian) investment being made in Volkswagen’s planned EV battery cell plant in St. Thomas, Ontario.
The union had been pressing for an end to the impasse, which led to a halt in construction since mid-May, over fears that it was jeopardizing a $4 billion project expected to create 2,500 jobs along with significant spinoff impacts. Production was planned to begin in the first quarter of 2024.
“We knew the high stakes. We knew these commitments had to be kept because the alternative would have been unthinkable for so many workers. I know what resonated with all parties was the persistent message from our union that thousands upon thousands of workers’ livelihoods were hanging in the balance throughout this dispute,” said Lana Payne, Unifor National President, in a news release. “We would like to thank Prime Minister (Justin) Trudeau, Premier Doug Ford and the company for reaching this important conclusion and taking the necessary action to secure the Stellantis production footprint in Canada.”
The impasse, however, went beyond just a dispute between the company and the federal government in Canada as pressure built on the provincial government to provide more support. At a recent news conference, Ford, the Ontario premier, said Ontario would be “putting more money on the table there.”
Contact Eric D. Lawrence: elawrence@freepress.com. Become a subscriber.