Stellantis EV battery plant construction resumes after financial deal with government

Wednesday’s deal essentially “mirrors” the benefits Stellantis and LG would have received under the IRA if their battery plant had been set up in the US, said Ontario Economic Development Minister Vic Fedeli.

“We’ve heard that Stellantis expects, if they were in the United States, over the course of time, they would receive $15 billion in tax breaks, so that would be expected in Canada,” Fedeli said in an interview.

‘GOOD DEALS FOR THE WORKERS’

He said the timeframe for that figure is roughly over 10 years, and it will depend on the start date and the level of production they achieve. Ontario has committed to fund one-third of the costs.

“It’s quite a good deal for workers in the industry,” said Fedeli.

The federal government called the deal “good for workers and good for Canada.”

“It will create and secure thousands of jobs_both in the auto sector and in related industries across Canada_and will further solidify Canada’s place as a leader in the global electric vehicle supply chain,” Deputy Prime Minister Chrystia Freeland and Industry Minister Francois-Philippe Champagne said in a statement.

Dong-Myung Kim, president and head of the Advanced Automotive Battery Division of LG Energy Solution, called it “a good day not only for our joint venture but also for Canada.”

“We are happy to finally move forward with building the country’s first major battery plant and become a central part of the local battery ecosystem,” Kim said in the same statement. “We are grateful to the federal and provincial governments for working together, and to everyone who worked tirelessly to get this deal done.”

Danies Lee, CEO of NextStar Energy, said the company “can now focus on what we do best.”

“We will soon produce state-of-the-art batteries here in Windsor, and we’re excited to grow and thrive with the community,” he said.

Production in Windsor is planned to start in 2024. The plant aims to have an annual production capacity in excess of 45 gigawatt hours and will create an estimated 2,500 new jobs in Windsor and the surrounding areas. The factory has the potential to make enough batteries for more than 400,000 vehicles a year.

The lithium-ion battery plant was first announced in March 2022.

‘HIGH STAKES’

NextStar Energy is one of eight battery plants that LGES has secured in North America in response to its growing EV market.

Unifor, the union that represents thousands of unionized Stellantis workers across Ontario and plans to do the same at the battery plant called the standoff “high stakes.”

“We knew these commitments had to be kept because the alternative would have been unthinkable for so many workers,” Payne said in a separate statement. “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.”

‘ROLLER COASTER RIDE’

Windsor Major Drew Dilkens said he was relieved.

“The last seven weeks has certainly been a rollercoaster ride for people in the community as we’ve waited for news on whether this deal could be secured,” he told The Canadian Press.

Dilkens called the Stellantis plant “monumental” for the region.

“If this did not happen, it would certainly have had a very negative impact on the future of our region,” Dilkens said.

With files from the Canadian Press.

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