What was supposed to be Canada’s first battery factory for electric vehicles has now been shut down due to a dispute between Stellantis and the Canadian government.
Construction work, which began last summer, has indeed been suspended until further notice.
Stellantis, the giant that includes the Chrysler, Jeep, Dodge and Ram brands, has partnered with the South Korean company LG Energy Solution for this facility located in Windsor, Ontario. The goal was to start operations in the winter of 2024, with an annual capacity of at least 45 GWh, making the site one of the largest battery factories in North America.
The project, valued at more than $5 billion, must be done with financial support from three levels of government, including approximately $500 million from Ottawa. However, Stellantis claims that the administration of Justin Trudeau has not delivered what it promised, without giving further details.
Alternative plans on the table
Quoting the Director of Communications for the Minister of Innovation, François-Philippe Champagne, Radio-Canada reports that negotiations are continuing in “good faith” between the two parties. The manufacturer has, however, hinted that it is working on alternative plans at the same time.
The Mayor of the City of Windsor, Drew Dilkens, also pointed the finger at Ottawa which, by not respecting its commitments, “puts in jeopardy not only the completion of the battery factory but also our efforts to attract other investments in the region. »
The Volkswagen effect
It all comes weeks after Volkswagen announced its future battery mega-factory in St. Thomas, Ont., valued at $7 billion. The federal government will grant it $700 million as well as incentives that could total $13 billion over 10 years.
Stellantis executives are certainly jealous of the deal, which has been driven by Canada’s desire to beat the Americans at their own game since the passage of the US Inflation Reduction Act.
By the way, it has not yet been specified for which vehicles the batteries produced by Stellantis in Windsor will be designed, but it is known that Ram (1500 REV), Jeep (Recon) and Dodge (Charger Daytona SRT) are preparing to market highly anticipated models next year.