Stellantis and LG Energy Solutions halt construction on part of EV battery plant in Ontario over federal funding concerns


Stellantis and LG Energy Solutions have halted construction on a portion of their electric vehicle (EV) battery plant in Windsor, Ontario. The two companies have said the work stoppage is due to the federal government not delivering what it agreed to when it committed to building the $5 billion plant in Canada last year.

First announced in March 2022, the plant will employ around 2,500 people and will produce battery cells and modules for over 500,000 EVs per year, supporting a significant portion of Stellantis’ North American production. The company’s noted noted that federal, provincial and municipal governments would provide funding to support the joint venture.

According to Stellantis, the federal government “has not delivered what it agreed to,” saying in a statement on Monday it was halting construction on the portion of the project related to battery module production.

“As of today, the Canadian government has not delivered on what was agreed to. Therefore Stellantis and LG Energy Solution will begin implementing their contingency plans. Effective immediately, all construction related to the battery module production on the Windsor site has stopped.” (via CBC)

As to what was agreed to that hasn’t been delivered, it is funding. Canada’s Industry Minister Francois-Philippe Champagne has said the federal government will increase its financial commitments to compensate for the incentives in the US from the Inflation Reduction Act (IRA) that was passed several months after the deal was announced. Champagne said the Ontario government needs to “pay its fair share” too, something which Premier Doug Ford said on Wednesday the province has now done.

“As you know, we put in our fair share and now we’re stepping up again to put more money because it’s all about the people, it’s all about making sure they have the jobs down in Windsor region and right across southwestern Ontario,” Ford said. (via StreetInsider)

With Ford’s statement on Wednesday it appears the stalemate has ended, but neither Stellantis nor LG Energy Solutions have announced construction has restarted.

The exact amounts each level of government originally committed to providing have not been disclosed, nor has how much extra money has been put in by each party. However, based on the financial commitments provided to Volkswagen to build their EV battery factory in St. Thomas, Ontario, which included $13 billion in subsidies, the amounts are likely substantial.

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