Stellantis stops building of Ontario EV battery module plant over federal budget

BE desk

Stellantis and LG Power Resolution (LGES) on Would possibly 15 ceased some building of its deliberate electric-vehicle battery manufacturing unit in Windsor, Ont., because it continues to spar with the government over monetary help.

The automaker is accusing Ottawa of reneging on a up to now made agreement.

“As of today, the Canadian Government has not delivered on what was agreed to therefore Stellantis and LG Energy Solution will begin implementing their contingency plans. Effective immediately, all construction related to the battery module production on the Windsor site has stopped,” Stellantis mentioned in a commentary Monday. 

The $5 billion plant, slated to start out operations in August 2024, will be capable to construct 45 gigawatt-hours (gWh) of lithium-ion cells and modules a future to feed the automaker’s meeting operations in Canada and america, Stellantis up to now mentioned.

Cells and modules are two independent portions, each to be assembled on the Windsor web page.

Framing of the module portion of the manufacturing unit is in part entire. Development of the cells division of the power is in its early levels.

Some job continues at the 220-acre (90-hectare) web page.

On the moment of the plant’s announcement, in March 2022, Canada’s Innovation Minister Francois-Philippe Champagne described the trade in, which incorporated about $1.48 billion from LGES and secret contributions from federal and provincial governments, as the biggest ever within the Canadian auto sector.


A spokesperson for Champagne mentioned on Would possibly 12 the “auto industry is crucial to the Canadian economy and to the hundreds of thousands of Canadian workers.”

“We proceed to barter in excellent religion with our companions. Our supremacy precedence is and rest getting the most efficient trade in for Canadians,” the spokesperson mentioned.

Laurie Bouchard, spokesperson for Champagne, on Would possibly 15 didn’t reply without delay to a query about Ottawa’s willingness to compare the United States $10 in step with kWh module credit score introduced in america.

Previous, Finance Minister Chrystia Freeland mentioned Canada was once having “good discussions” with Stellantis, upcoming a newspaper reported that automaker was once in search of higher executive subsidies than in the beginning introduced by means of Ottawa.

“We are, as the federal government team working very, very hard on Stellantis, we’re very, very focused on it,” Freeland advised journalists on a choice upcoming conferences with G7 companions in Japan.

Stellantis is now threatening to tug the plug at the module portion of the plant except the trade in with the federal government is sweetened to the extent Volkswagen won this future, The Toronto Superstar newspaper reported Would possibly 12, bringing up unnamed resources.

Canada’s trade in with Volkswagen for a battery gigafactory in St. Thomas, Ont., virtue as much as $13 billion in incentives and introduced in April, is the largest unmarried funding ever within the nation’s electric-vehicle provide chain.

The government has dedicated to lend as much as $13.2 billion in production tax credit via 2032, pace Europe’s biggest carmaker is making an investment as much as $7 billion to form the plant St. Thomas, Ontario.

The incentives just about fit the ones within the U.S. Inflation Aid Employment, which incorporates a US $10 in step with kWh incentive for battery module manufacturing.

On the other hand, Volkswagen will obtain disagree federal aid for battery modules made in St. Thomas., in line with Hans Parmar, a spokesperson for Innovation, Science and Financial Construction Canada.

The deliberate St. Thomas funding is just for cells, Parmar advised Automobile Information Canada. The IRA incentive for the ones is US $35 in step with kWh of cellular manufacturing.

“The U.S. Inflation Reduction Act puts Canadian battery production at a significant disadvantage. Corresponding support is needed to level the playing field if Canada is going to be part of the emerging North American battery supply chain,” mentioned Brian Kingston, head of the Canadian Car Producers’ Affiliation, which represents the pursuits of and lobbies in the name of the Detroit 3 in Canada.

Ontario Premier Doug Ford advised the Canadian Press that the government must aid Stellantis in the similar approach it did Volkswagen.

“It really worries me,” Ford mentioned upcoming an unrelated announcement in Mississauga, Ont. “We need the federal government to come to the table and show their support like they have all along.”

The province publish $500 million for each offers, Ford mentioned, and is making sure roads and effort for the plant.

“We’ll go toe to toe with any state down in the United States,” he mentioned. “The only thing we can’t do is go toe to toe with the U.S. federal government. That’s the federal Canadian government’s job, and they can do it. We’re confident that they made a promise to the people of Windsor – I was down there with the prime minister – now they need to keep their promise to the people in Windsor.”


In the meantime, Windsor Mayor Drew Dilkens and Unifor, the union representing Detroit 3 hourly staff in Canada issued independent statements at the weekend, urging the 2 facets to get to the bottom of their dispute.

“Government and Stellantis are playing a high-stakes game that is betting the livelihoods of tens of thousands of Canadian autoworkers,” mentioned Unifor Nationwide President Lana Payne. “Commitments were made and Unifor and our members fully expect that all parties live up to them.”

Dilkens laid the blame on Ottawa. “The entire deal is in now in question due to the federal government not fulfilling their commitments, jeopardizing not only the completion of the EV plant, but also our efforts to attract additional investment to the region.”

Town, he famous, “played a crucial role … assembling land and providing funding to support servicing and preparing the lands for the facilities.”

Flavio Volpe, president of the Automobile Portions Producers’ Affiliation, additionally weighed in, expressing optimism that the funding will walk.

“Fortunately, both parties are very committed to the city, the supply chain and it’s workers,” Volpe mentioned in a tweet posted Would possibly 13. “I expect that we will see this through.” 

What has been uncovered, he added, is “a tough negotiation gone public. When Canada landed this incredible investment, the USA countered with the biggest subsidy offer in automotive history. Stellantis is addressing its fiduciary responsibility to its shareholders as it should.”

With information from Reuters, The Canadian Press and David Kennedy of Automobile Information Canada.

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