Stellantis halts construction on Windsor EV battery plant amid federal funding dispute

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Ontario Construction News staff writer

Stellantis has stopped construction on a $5-billion electric vehicle battery plant in Windsor, saying the federal government has not delivered on what was promised.

“Effective immediately, all construction related to the battery module production on the Windsor site has stopped,” the automaker said in a statement. “As of today, the Canadian Government has not delivered on what was agreed to therefore Stellantis and LG Energy Solution will immediately begin implementing their contingency plans.”

The automaker, which makes Chrysler, Ram and Fiat cars among others, and South Korean battery-maker LG Energy Solution announced the $5-billion plant last year and said it was expected to create 2,500 jobs.

Speaking to reporters in Mississauga on Monday, Premier Doug Ford called the situation “alarming.”

“It really worries me. We need the federal government to step up as they did for Volkswagen,” said Ford, noting Queen’s Park gave Stellantis and VW $500 million apiece in provincial aid.

“We’ve signed a deal with Stellantis … quite some time ago … on infrastructure and we gave them the exact same amount as we gave Volkswagen and we need the federal government to come to the table and show their support like they have all along,” he said, stressing Prime Minister Justin Trudeau’s government has been “great partners” on numerous auto deals.

Volkswagen’s payout could total $13.2 billion in public cash over five years for the German auto giant to build a London-area “gigafactory” employing 3,000 workers by 2027. Canada’s deal with Volkswagen includes subsidies worth up to $13 billion plus a $700 million grant.

The federal government says negotiations are ongoing.

Construction started late last year at the Stellantis Windsor site known as NextStar Energy, with production operations planned to launch in the first quarter of 2024. The facility was expected to be fully operational by 2025.

“The entire deal is now in question due to the federal government not fulfilling their commitments, jeopardizing not only the completion of the EV plant but also our efforts to attract additional investment to the region,” Windsor Mayor Drew Dilkens said in a statement. “This counterproductive impasse creates significant challenges and risks thousands of jobs in our community.”

Dilkens said the city has provided funding to prepare the site for the facility.

“As the host community, the City of Windsor has the most at risk, and we anticipate the spirit of partnership and collaboration will put us back on the path of completing this significant project,” Dilkens said.

The potential Stellantis project is not the only major manufacturing initiative in the works in the province. The federal and Ontario governments recently closed a deal with Volkswagen to build an EV battery plant in St. Thomas that includes billions of dollars in government subsidies.

The investment is the largest in Canada’s auto sector in history, federal Minister of Innovation, Science and Industry François-Philippe Champagne said at the press conference. Hundreds of millions in municipal, federal and provincial government subsidies are expected to be announced at a future date.

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