Stellantis deal reached to restart EV battery
factory construction
By Sean Previl Global News
Posted July 5, 2023
WATCH: Stellantis deal reached to restart EV battery factory construction
A deal has been reached between Stellantis and the federal and Ontario governments to resume construction of the electric vehicle battery gigafactory in Windsor, Ont., the company confirmed on Wednesday.
It said in a news release that NextStar Energy, which had a joint venture with Stellantis and LG Energy Solution, signed a “binding agreement that secures the future of battery cell and module production in Windsor.”
“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 (Inflation Reduction Act),” Stellantis North America chief operating officer Mark Stewart said in a joint statement with LG Energy.
The deal comes after just over a month of negotiations following a decision by Stellantis to stop building the plant, saying the federal government had not delivered what was promised and threatened to move the plant elsewhere.
The plant was announced last year and it was expected to create 2,500 jobs, with all levels of government to provide financial support.
Last month, Stellantis said it had received and was reviewing an offer to keep the factory as both Ottawa and Ontario said negotiations were ongoing.
Details of the deal have not been released, however, Innovation, Science and Industry Minister François-Philippe Champagne said in June that the amount the governments will offer shouldn’t surprise anyone as Canada aimed to “level the playing field” and match subsidies offered by the U.S. under the Inflation Reduction Act (IRA).
Ontario’s Economic Development Minister Vic Fedeli told Global News in an interview that the deal amounts to $15 billion in tax incentives for battery production with the province taking on $5 billion.
1:24 Stellantis has new offer to keep EV gigafactory in Windsor, Ont.
In addition, the minister said the deal has resulted in a Canada-Ontario auto pact, that will see identical incentives offered to other battery manufacturers who set up shop in the province.
“I think this is a historic deal, it’s a great agreement and it protects the thousands of jobs quite frankly that were at stake,” Fedeli said.
Dong-Myung Kim, president and head of the Advanced Automotive Battery Division of LG Energy said the company was happy to finally move forward with building the plant.
“It’s a good day not only for our joint venture, but also for Canada,” he said in the statement.
3:27 Stellantis deal: Trudeau says world ‘paying attention’ to Canada’s supply chains
Stewart also thanked the efforts of Unifor in working to get a deal done “in our shared commitment to protecting thousands of new jobs.”
The union said in a statement it welcomed the agreement and thanked the governments involved and the company “for reaching this important conclusion and taking the necessary action to secure the Stellantis production footprint in Canada.”
—With files from Colin D’Mello, Global News
OTTAWA (Reuters) - Canada's federal government and Ontario said on Thursday they would together provide up to C$15 billion ($11.3 billion) in performance incentives for a Stellantis-LG Energy Solution (LGES) electric-vehicle battery plant being built in Windsor.
"Today's announcement will protect and create thousands of good-paying jobs for workers, including unionized jobs, as we establish an end-to-end electric vehicle supply chain to strengthen the clean economy," the federal and provincial governments said in a joint statement.
($1 = 1.3320 Canadian dollars)
(Reporting by Ismail Shakil in Ottawa)
Stellantis reaches deal with Canada, ending months-long battery plant feud
, Bloomberg News
Canada has reached an agreement with automaker Stellantis NV to increase government financial support for an electric-vehicle battery plant, ending a standoff that began in May when the carmaker halted construction on the project.
The plant, built in partnership with South Korea’s LG Energy Solution Ltd., will be located in Windsor, Ontario, across the border from Detroit. It’s expected to cost more than $5 billion (US$3.8 billion) to build.
Unifor, a union that represents autoworkers in Canada, confirmed the deal in a statement.
The project was first announced in March 2022, but the passage of the incentive-rich US Inflation Reduction Act last summer threw a wrench into the process. Canada publicly promised to create a level playing field with the US subsidies, but talks with Stellantis on how to do that dragged on for many months.
A key obstacle was removed recently when Ontario Premier Doug Ford pledged his government would cover a third of the cost of the subsidies.
Financial terms of the deal haven’t been disclosed, but the total package is expected to be near, or even exceed, a similar agreement for a Volkswagen AG battery plant that may cost the government more than $13 billion over a decade.
Under the Inflation Reduction Act, the Stellantis plant would qualify for as much as $19 billion in subsidies, according to one expert’s calculation. However, numerous factors — such as the fact the project was announced before the US subsidies existed — should allow Canada to bring that cost down.
At the original announcement, the federal and provincial governments committed about $1 billion to Stellantis to offset capital costs.
If completed, the 45 gigawatt-hour factory would create 2,500 jobs and supply Stellantis’s assembly plants in North America.
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