Construction resumes at Stellantis EV battery factory

Built at $3.7 billion Electric car battery factory jointly owned by Stellantis and LG Energy Solution The automaker announced on July 5 that it had resumed

NextStar Energy, the name of the Windsor, Ontario joint venture, entered into a binding agreement with the federal government to guarantee the production of battery cells and modules at the facility.

In a statement, Sterantis said the deal included the Canadian government’s promise to “create a level playing field with the U.S. Inflation Act (IRA).”

NextStar’s lawyers spent the month reviewing the financial aid package the federal government gave the company on June 2nd.

The terms of the offer are unknown. But Ontario has pledged to pay up to one-third of the total package. The amount could be as high as $3.7 billion, according to people familiar with the matter.

NextStar said earlier this year that it wants more subsidies to subsidize the cost of producing cells and modules. He was seeking conditions similar to those of the US IRA.

Stellantis, the federal government, and the province of Ontario then blamed each other for the conflict in May and early June.

All levels of government said they wanted to provide what they considered fair.

The automaker suspended some construction work on May 15.

Stellantis said at the time that the federal government had not met its financial commitments to the project and that the company had a “contingency plan” in place.

According to a source at the time, canada auto news The plan was to move module production somewhere in the US, possibly Michigan.

further subsidies

After the US announced a new production tax credit for EV battery makers as part of the IRA in August 2022, NextStar sought more government help. Under the provisions of this US law, battery manufacturers will be entitled to a tax credit of US$35 per kilowatt hour from now until 2030, when the phase-out begins. By 2033 they will be obsolete. You will also receive a credit of USD 10 per kWh for modules within the same schedule.

After Volkswagen received up to $9.7 billion in incentives to build its own EV battery plant in St. Thomas, Ontario, Stellantis stepped up earlier this year and began threatening contingency plans for its Windsor plant. rice field.

“The IRA has fundamentally changed the landscape of battery production in North America, making it difficult to produce competitively priced state-of-the-art batteries in Canada without the same level of government support,” said Stellantis North America. Chief Operating Officer Mark Stewart said. He said in a statement emailed to Automotive News Canada. “We are pleased that the federal government has returned with the support of state governments and has fulfilled its promise to achieve a level playing field with the IRA. We are resuming construction.

“We are very appreciative of the government’s leadership in resolving and implementing this agreement. [Unifor President] Unifor’s Lana Payne and her team join us in our shared commitment to protecting thousands of new jobs as we achieve the electrified future driven by the Dare Forward 2030 Strategic Plan. You have vigorously advocated. ”