Stellantis stops construction of Ontario EV battery module plant in excess of federal cash

Stellantis and LG Power Answer (LGES) on Might 15 ceased some design of its planned electric-automobile battery manufacturing facility in Windsor, Ont., as it continues to spar with the federal governing administration about financial help.

The automaker is accusing Ottawa of reneging on a previously made promise.

“As of nowadays, the Canadian Federal government has not shipped on what was agreed to consequently Stellantis and LG Strength Answer will start off utilizing their contingency strategies. Effective straight away, all development linked to the battery module output on the Windsor web page has stopped,” Stellantis claimed in a statement Monday. 

The $5 billion plant, slated to get started functions in August 2024, will be ready to create 45 gigawatt-several hours (gWh) of lithium-ion cells and modules a calendar year to feed the automaker’s assembly functions in Canada and the United States, Stellantis earlier explained.

Cells and modules are two different pieces, the two to be assembled at the Windsor web page.

Framing of the module part of the manufacturing unit is partly entire. Design of the cells section of the facility is in its early phases.

Some exercise proceeds on the 220-acre (90-hectare) web-site.

At the time of the plant’s announcement, in March 2022, Canada’s Innovation Minister Francois-Philippe Champagne described the offer, which provided about $1.48 billion from LGES and undisclosed contributions from federal and provincial governments, as the largest ever in the Canadian auto sector.


A spokesperson for Champagne claimed on May well 12 the “auto field is crucial to the Canadian financial system and to the hundreds of hundreds of Canadian staff.”

“We proceed to negotiate in good religion with our associates. Our prime priority is and remains finding the ideal offer for Canadians,” the spokesperson stated.

Laurie Bouchard, spokesperson for Champagne, on May 15 did not react straight to a dilemma about Ottawa’s willingness to match the US $10 for each kWh module credit history presented in the United States.

Earlier, Finance Minister Chrystia Freeland mentioned Canada was having “fantastic discussions” with Stellantis, soon after a newspaper claimed that automaker was seeking for far better government subsidies than originally offered by Ottawa.

“We are, as the federal governing administration team working extremely, quite tough on Stellantis, we are incredibly, quite concentrated on it,” Freeland told reporters on a call immediately after meetings with G7 companions in Japan.

Stellantis is now threatening to pull the plug on the module part of the plant unless of course the deal with the govt is sweetened to the degree Volkswagen received this calendar year, The Toronto Star newspaper noted May possibly 12, citing unnamed resources.

Canada’s offer with Volkswagen for a battery gigafactory in St. Thomas, Ont., value up to $13 billion in incentives and introduced in April, is the most important single financial investment ever in the country’s electrical-auto source chain.

The federal govt has committed to deliver up to $13.2 billion in manufacturing tax credits via 2032, when Europe’s major carmaker is investing up to $7 billion to create the plant St. Thomas, Ontario.

The incentives virtually match people in the U.S. Inflation Reduction Act, which contains a US $10 for every kWh incentive for battery module production.

On the other hand, Volkswagen will acquire no federal assistance for battery modules produced in St. Thomas., according to Hans Parmar, a spokesperson for Innovation, Science and Financial Improvement Canada.

The prepared St. Thomas expense is only for cells, Parmar told Automotive News Canada. The IRA incentive for these is US $35 for every kWh of mobile output.

“The U.S. Inflation Reduction Act puts Canadian battery production at a significant drawback. Corresponding assistance is necessary to stage the taking part in subject if Canada is going to be section of the emerging North American battery offer chain,” mentioned Brian Kingston, head of the Canadian Auto Manufacturers’ Association, which represents the interests of and lobbies on behalf of the Detroit 3 in Canada.

Ontario Leading Doug Ford informed the Canadian Push that the federal government desires to assist Stellantis in the exact same way it did Volkswagen.

“It definitely problems me,” Ford stated immediately after an unrelated announcement in Mississauga, Ont. “We want the federal govt to arrive to the table and display their assistance like they have all alongside.”

The province set up $500 million for the two offers, Ford mentioned, and is making sure roadways and electricity for the plant.

“We will go toe to toe with any point out down in the United States,” he stated. “The only factor we won’t be able to do is go toe to toe with the U.S. federal governing administration. Which is the federal Canadian government’s position, and they can do it. We’re self-assured that they manufactured a promise to the people of Windsor – I was down there with the key minister – now they have to have to preserve their promise to the people in Windsor.”


Meanwhile, Windsor Mayor Drew Dilkens and Unifor, the union symbolizing Detroit A few hourly staff in Canada issued different statements on the weekend, urging the two sides to solve their dispute.

“Government and Stellantis are taking part in a high-stakes video game that is betting the livelihoods of tens of countless numbers of Canadian autoworkers,” claimed Unifor National President Lana Payne. “Commitments were made and Unifor and our members fully anticipate that all events live up to them.”

Dilkens laid the blame on Ottawa. “The whole deal is in now in question owing to the federal government not satisfying their commitments, jeopardizing not only the completion of the EV plant, but also our attempts to appeal to supplemental expense to the location.”

The metropolis, he observed, “played a crucial purpose … assembling land and furnishing funding to guidance servicing and planning the lands for the services.”

Flavio Volpe, president of the Automotive Parts Manufacturers’ Affiliation, also weighed in, expressing optimism that the investment decision will carry on.

“Fortunately, equally parties are very committed to the city, the offer chain and it’s workers,” Volpe explained in a tweet posted Could 13. “I expect that we will see this by way of.” 

What has been exposed, he additional, is “a hard negotiation long gone community. When Canada landed this unbelievable investment decision, the United states countered with the most important subsidy supply in automotive heritage. Stellantis is addressing its fiduciary responsibility to its shareholders as it must.”

With documents from Reuters, The Canadian Push and David Kennedy of Automotive News Canada.

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