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Stellantis and LG Energy Solution have reached a deal to continue the construction of the NextStar electric vehicle (EV) battery plant in Windsor, Ont., the company confirmed Wednesday.
Construction has resumed, Stellantis said in an evening statement. The exact breakdown of the deal and how much it’s worth are still unknown.
“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],” said Mark Stewart, Stellantis chief operating officer North America.
It’s been more than seven weeks since we learned the future of the plant being built in Windsor was in jeopardy. Stellantis says NextStar Energy is the first large-scale EV battery plant in Canada.
In early June, Stellantis and the federal government confirmed the automaker and LG Energy Solution received an offer from Ottawa, and their financial and legal teams were mulling it over.
Prime Minister Justin Trudeau previously said the offer was “respectful to taxpayers” and would create “great jobs” for generations to come to secure a future in communities across southern Ontario.
In May, Stellantis said it was moving to “contingency plans” because the federal government wasn’t honouring its agreement. That’s when the automaker stopped most of its construction at the site.
Word of a tentative deal being reached was first reported by the Toronto Star on May 31.
Canada’s financial package with another automaker, Volkswagen, which plans to open a massive factory in St. Thomas, Ont., was believed to be connected to the impasse, according to industry experts, as was new U.S. legislation that enables unprecedented incentive offers for companies — something Canada could have difficulty matching.
Premier Doug Ford said Ontario would be covering one-third of the cost of an agreement and he didn’t believe giving Stellantis more was setting a bad bargaining precedent for the province.
South Korean battery-maker LG Energy Solution and Stellantis announced the $5-billion project last year, and said it was expected to create 2,500 jobs and open sometime in 2024.
In a media release, Stewart said the U.S. Inflation Reduction Act, which added incentives for companies to locate EV plants south of the border, “changed the landscape for battery production in North America, making it challenging to produce competitively priced, state-of-the-art batteries in Canada without an equivalent level of support from government.”
Dong-Myung Kim, president and head of the Advanced Automotive Battery Division of LG Energy Solution, called Wednesday “a good day not only for our joint venture but also for Canada.”
Unifor, which represents many Windsor autoworkers, said the deal will preserve jobs.
“We knew the high stakes,” Lana Payne, the union’s national president, in a statement. “We knew these commitments had to be kept because the alternative would have been unthinkable for so many workers.
“I know what resonated with all parties was the persistent message from our union that thousands upon thousands of workers’ livelihoods were hanging in the balance throughout this dispute.”
When automaker Stellantis announced a halt in construction on an EV battery plant in Ontario, it revealed a dispute with the federal government. Ottawa promised big tax incentives for the plant, but a few months after the deal was signed, an American law came into effect that changed everything. About That’s Lauren Bird explains how unprecedented investments south of the border led to the Stellantis stoppage.
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