Feds, Stellantis reach deal over battery plant in Windsor, construction to restart

OTTAWA –

Stellantis and LG Energy Solution say their electric vehicle battery plant in Windsor is back on track after reaching a “binding” financing deal with the governments of Canada and Ontario.

The two companies stopped construction earlier this year to negotiate for government funding to match what the United States would offer under its new Inflation Reduction Act.

In a statement issued at the end of business today, the two companies say construction will resume immediately on the plant they are calling NextStar Energy.

The plant was first announced in the spring of 2022 and Ottawa and Ontario were going to contribute $500 million each towards construction costs.

Stellantis and LG Energy went back to the negotiating table months later when the U.S. IRA put billions of dollars in production tax credits on the table for battery makers south of the border.

In March, Canada reached a deal that will see Volkswagen get up to $13 billion in production subsidies for batteries they produce at a plant planned for St. Thomas, Ont., and Stellantis and LG Energy wanted a similar agreement to continue on with their plant in Windsor.

This report by The Canadian Press was first published July 5, 2023.